When adults fail to plan for how they or their property should be managed in the event that they lose their mental capacity, they may find themselves under the care of a guardian and/or conservator appointed by a Minnesota court. Guardians and conservators cost money, and they are under court supervision. » Read more..
Archive for July 29, 2012
Consider these consequences if you die in Minnesota without an estate plan:
- If you and your spouse die while your children are under age 18, the State of Minnesota will select a guardian for them, and you may not like the state’s choice. Solution: A Will enables you to nominate a guardian for your minor children.
- As soon as they turn age 18, your kids will get access to all of the money and property that they inherit from you, and they’ll be able to spend the money however they wish. Solution: A Trust can be written to control the ages at which your children gain access to the money and property that they inherit from you. » Read more..
In Minnesota, an estate will need to go through probate if: 1) the deceased owned real estate – of any value — in his or her name alone or 2) the deceased owned personal property in his or her name alone in excess of $50,000 in value at the time of death.
However, the most oft-cited complaint about probate is that it is costly. The “costly” reputation comes from the fact that – in some states – attorneys are paid a percentage of the decedent’s assets. Of course, whether the percentage yields a large number depends on the size of the estate. In Minnesota, attorneys are paid for the time actually spent on the probate matter.
Probate does take some time, however. Informal probate takes six months or longer in Minnesota, but is cheaper than formal probate because there are no probate court hearings and limited court involvement. Informal probate is allowed in Minnesota if, for example, the Will language is clear, there are no disgruntled heirs and there are no title problems with the real estate. If there’s any sort of issue, the probate will be formal.
There are various ways to avoid probate, but having a Will does not avoid probate. Indeed, a purpose of probate is to determine that the Will presented to it is valid.
Moreover, real estate can trigger a probate action in each state where the deceased owned real estate solely in his or her name. Persons wishing to avoid probate in their home state or in other states where they own real property may do so by owning the property jointly with another person (so-called “joint tenancy with a right of survivorship”) or by placing the real estate in a revocable living trust.
To avoid probate triggered by the $50,000 threshold in Minnesota for personal assets, Minnesotans should not be the sole owner of the bulk of their assets. Assets escape probate in Minnesota if they are held in a revocable living trust, a “payable on death” account, a “transfer on death” account, as a “transfer on death deed”, or in joint tenancy with a spouse, child or other person. Retirement accounts and life insurance policies that name beneficiaries (that is, beneficiaries other than the decedent’s “estate”) are also assets that do not trigger probate.
Of course, beneficiaries care about the time involved with probate because they want to know: “When will I get my money?” The more complicated the estate, the longer it takes. Particularly if there are some conflicts, it is best if the personal representative doesn’t distribute assets until all expenses have been paid and the court has approved “the final account”. A partial distribution may be made earlier if it is clear that the estate has sufficient assets to cover all the bills. Under Minnesota law, creditors are given a period – usually four months – to file claims.
©2012 Wittenburg Law Office, PLLC. All rights reserved.
Disclaimer: This Blog is for informational purposes only and is not to be construed as legal advice. If you have questions, please seek the advice of an attorney licensed to practice law in the state where you live. Wittenburg Law does not expressly or implicitly warrant the accuracy or reliability of any of the Blog’s contents. An attorney-client relationship is not formed by reading this Blog. If you are interested in Wittenburg Law’s representation of you, you must contact Wittenburg Law for a determination of whether your matter is one for which Wittenburg Law is willing and able to accept representation of you.
Minnesota’s relatively new Transfer on Death Deed (TODD) — a so-called “Will substitute for real estate” — works best when the property owner has a simple distribution plan in mind for the owner’s real property at death.
Historically in Minnesota, when one person owned a piece of real estate and then died, a probate action was automatically required. By authorizing TODDs effective August 1, 2008, the Minnesota Legislature created the opportunity to avoid probate. In other words, if the TODD is executed correctly, no probate action is triggered simply by the ownership of real estate. » Read more..
A life estate is established when a parent transfers title to his or her home or farm to his or her children, but reserves the right to live in the house for the remainder of the parent’s life. In legal terms, the parent is known as the “life tenant”. The children are the “remainderpersons”, i.e. the persons entitled to inherit the entire property upon the death of the life tenant. The life tenant pays the property taxes, insurance and upkeep, and is entitled to any income generated by the property.
Persons writing Wills in Minnesota select a “personal representative” (known as “executor” in some states) to settle their estates after they die. The personal representative manages and distributes the deceased’s assets, per the Will instructions, after first paying the deceased’s creditors, the costs of administering the estate, and any estate taxes owed. In Minnesota, the personal representative has the power to sell real estate, liquidate assets, and determine which bills should be paid and which should be denied. » Read more..