Estate Planning Blog

What Does “Per Stirpes” Mean?

Estate Plan“Right of representation” and “per stirpes” are two ways of describing the same method for dividing the assets of the deceased, but what do the phrases mean?

A second way of dividing a deceased person’s assets in Minnesota is “per capita at each generation”.

Translation?  » Read more..

Naming Life Insurance Beneficiaries

Headline of Life Insurance for background

Chances are that you no longer remember whom you’ve named as the beneficiary of your life insurance policy. You should find out. Why? The beneficiaries that you listed with your life insurance company trump any beneficiary designations that you may have made via your Minnesota Will.

It’s also important that your loved ones know that you have a life insurance policy and where to find it.  Otherwise, the life insurance money may go unclaimed! » Read more..

Estate Planning: Gifts & Gift Taxes

Cash pileJust as gifts come in all shapes and sizes, so do the tax rules and regulations regarding the gifts of your assets that you make during your lifetime or at death. Generally speaking, the donor of the gift is responsible for paying any gift taxes owed.

The Internal Revenue Service (IRS) first states that any gift is a taxable gift, but then applies exceptions to that general rule. » Read more..

Creating a Valid Minnesota Will

Will docA Will must meet certain criteria to be considered a valid Will in Minnesota.

To make a Will, you must be at least 18 years of age, and must be “of sound mind”.

The Will must be in writing, and must be signed by you, by another person at your direction, or by your conservator pursuant to a court order. Two other individuals must sign your Will as witnesses. A beneficiary of the Will may sign as a witness. However, Minnesota lawyers often prefer that neutral parties — rather than beneficiaries — serve as witnesses so as to better avoid a potential future accusation that the maker of the Will was pressured by the beneficiary to sign the Will.    » Read more..

Your Will Doesn’t Cover All Your Assets

Will docThe danger of thinking that your Will covers the transfer of all your assets at your death is that the distribution of your assets may not end up as you intended.

Your Minnesota Will covers only what is known as your “probate assets”. If your Will provides that each of your 3 children is to inherit one-third of your estate, each child will inherit one-third of your “probate assets” only.

Stated another way, the wording of your Will has no impact on assets that are considered “non-probate assets”, and your non-probate assets may be a significant portion of your estate. » Read more..

An Estate Plan is Not Just Documents

Estate PlanYou may be seriously short-changing yourself and your heirs if you try to create an estate plan by filling out a form downloaded from the Internet.

An estate plan is more than just documents.

Think of it this way: Chances are that you aren’t just looking for a certain “pill” when you visit a doctor. Instead you want to tap into the doctor’s experience and knowledge so that the remedy prescribed for you correctly treats your symptoms. Similarly, it’s best to tap into the knowledge and experience of an estate planning lawyer in devising your estate plan.  Just like a pill is merely one possible consequence of a medical consultation, a Will document is but one aspect of your consultation with an estate planning lawyer. » Read more..

Where’s the Check for My Inheritance?

Wooden dice with question marks on it over white background

The checks for your inheritance may come in partial payments over many months, be tied up for years in a trust, or come within weeks. Or, there may be nothing left for you to inherit.

Much of the timing of the disbursement of your inheritance depends on the type and value of the deceased’s assets, the creditor claims against those assets, whether probate is required, and whether the deceased wanted your inheritance to be distributed outright to you or tied up in a trust for some period of time. » Read more..

Historical Estate Tax Perspective

Tax TimeThe dollar value of assets that can be owned by a Minnesotan at death without incurring federal or Minnesota estate taxes has changed significantly over the past several years.

Thus, many Minnesotans will not owe any Minnesota estate taxes, and fewer still will owe a federal estate tax.

The exclusion from federal estate taxes for a person dying in 2016 is $5,450,000. As recently as 1997, the exclusion was $600,000.  In 2001, the exclusion from federal estate taxes was $675,000. » Read more..

Which is Better: Will or Trust?

Trust Doc 2If your goal is to find the cheapest and easiest administration of your estate after you die, a Revocable Living Trust may be your best bet.

The upfront costs of creating a Revocable Living Trust is almost certain to be higher than creating a Will, but a Revocable Living Trust may be cheaper in the end. Why? The Revocable Living Trust typically avoids the time and expense of probate. » Read more..

Keeping the Minnesota Cabin in the Family

Mountain Retreat

Keeping the beloved Minnesota cabin in the family is an oft-heard goal that is frequently addressed by placing the cabin in a revocable living trust or by setting up a limited liability company (LLC) to own the cabin.

Another common goal is to avoid potential future ownership of the revered family cabin by outsiders — i.e., the creditors or divorcing spouses of the next generation of family members.  Blocking disputes among next-generation owners from forcing a sale of the cabin, through a court “partition” action, may also be a priority. » Read more..