At death, your assets are figuratively divided into two piles – probate assets and non-probate assets – but why should you care?
The division has nothing to do with whether or not you owe federal or Minnesota estate taxes. For that purpose, all of your assets are counted, including the value of any life insurance benefits that are paid out to your beneficiaries upon your death.
However, the categorization into probate and non-probate assets matters when it comes to determining whether or not the aid of the probate court is needed to transfer title to the new owners or whether the transfer can occur without the court’s involvement. » Read more..
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Suppose that your Will states that all of your three children are to inherit your assets equally. Suppose also that the beneficiary designation on your life insurance policy only lists two of your children as beneficiaries because your third one had not been born at the time that you filled out the form years ago.
What happens? » Read more..
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The fact that, as a woman, you are likely to live longer and have lower lifetime earnings than men makes you especially vulnerable in retirement. Consequently, it is especially important that you understand and undertake estate planning to secure a comfortable standard of living.
So, what should women know? » Read more..
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Hiring a Minnesota estate planning lawyer to draft legal documents to provide for your heirs is only the first step to ensure that your property is distributed as you desire after your death. You still need to ensure that your property is titled in such a way as to take full advantage of your Will and/or Trust.
And, while you’re at it, review your beneficiary designations because some assets override any language in your Will or Trust documents and pass to whomever you named as the beneficiary. For example, life insurance proceeds and retirement benefits are paid to your designated beneficiary. Similarly, bank accounts designated as Payable on Death (also known as P.O.D. accounts), and securities accounts designated as Transfer on Death (also known as T.O.D. accounts) also transfer to whomever you named as beneficiaries. » Read more..
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An oft-told tale describes a young man’s efforts to entice a beautiful woman to marry him because he would soon inherit $20 million from his ailing father. Impressed, the woman asks the man for his business card. At their next encounter, the beautiful woman introduces herself as the man’s stepmother – i.e. showing that women are better financial planners than men.
This imaginary woman’s expertise in financial planning is based on laws that provide for surviving spouses before providing for a dead person’s children. The young man was now going to have to wait for his new stepmother to pass on, which – if this was a May-December romance – could be some years from now. » Read more..
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Mistake #1: A Will controls the distribution of all of the deceased’s possessions. Reality: The Will only controls the distribution of the deceased’s “probate estate”. Not included in the probate estate are jointly held property, transfer on death (T.O.D.) accounts, payable on death (P.O.D.) accounts, and property that passes based on beneficiary designations. For example, life insurance proceeds and retirement benefits pass based on beneficiary designations. » Read more..
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Don’t have $1 million? You still may need to worry about the Minnesota estate tax, which applies to persons holding more than $1 million in assets at death. Why? Life insurance. Life insurance proceeds paid out to your beneficiaries at your death get added to your assets for the estate tax tally even though you personally never benefit from the life insurance. » Read more..