Wills & Probate

Wills

A will is a  legal document that allows you to to transfer your property following  your death. A will ensures that your money, property, and personal  belongings will be distributed in accordance with your wishes. It also  allows you to have full use of your property while you are alive. The  law does not require you to have a will, though, and if you die without  one, Minnesota’s inheritance laws will control how your estate is  divided. In most every case, your property will go to your closest  relatives. If you have a spouse and children, the property will go to  them by a set formula. If not, the property will descend in the  following order: grandchildren, parents, brothers and sisters, or more  distant relatives if there are no closer ones.

 

A will is  necessary if you want to leave property to a friend or a charity of your  choice, to give certain personal items to certain people, or to leave  someone out of your will who would otherwise inherit money or property  from you. You may also want to appoint someone to handle your estate. 

In Minnesota, the following rules apply to wills:


  • You must be at least 18 years of age to make a will;
     
  • The will must be in writing;
     
  • The will  must be signed by you, by another person at your direction and in your  presence, or by your conservator pursuant to a court order;
     
  • The will must be witnessed by at least two people, both of whom must also sign the will; and
     
  • You must intend for the document to operate as a will.
     

Generally, the following basic elements are included in a will:

  • Your name and address;
     
  • A description of any assets you wish to give to a specific person;
     
  • Names of spouse, children, and other beneficiaries, such as friends or charities;
     
  • Alternative beneficiaries, in the event a beneficiary dies before you do;
     
  • Establishment of trusts, if desired;
     
  • Cancellation of debts owed to you, if desired;
     
  • Name of a trustee for any trusts created;
     
  • Name of a personal representative to to manage the estate;
     
  • Name of a guardian for any minor children;
     
  • Name of an alternative guardian, in the event your first choice is unable or unwilling to act;
     
  • Your signature; and
     
  • Your Witnesses’ signatures.
     

Your will  should state with specificity who will get your property upon your  death. You should also indicate, in an itemized and organized manner,  how much each person will receive. You should be sure to name a guardian  for your minor children and a personal representative for your will.


Personal Representative


A personal  representative (also known as an executor or administrator) is the  person who oversees payment of your debts and distribution of your  assets according to your will. A personal representative is considered a  fiduciary. This means he or she must observe a high standard of care  when dealing with the estate. You should identify a personal  representative in your will. Most people choose their spouse, an adult  child, a relative, friend, trust company or attorney to perform these  duties. Your personal representative will be handling your assets, so it  is imporant that you select someone you trust.


Probate


Probate is  the legal process os settling your estate in court after you die. Your  property is inventoried, your debts and taxes are paid, and everything  left over is divided among your heirs. Probating a will begins by filing  an application with probate court. Probate ends when all debts are paid  and all assets are distributed. If there are disagreements over your  will, a probate judge will resolve the differences. It is often  advisable to obtain the services of an attorney to ensure that an estate  is probated correctly.

It should  be noted that certain types of assets are not subject to probate. These  include real property held in joint tenancy, jointly held bank accounts,  payable-on-death accounts, life insurance proceeds to a specific  beneficiary, and pension benefits with a designated beneficiary in the  event you die. 


Distributions to Heirs


If there is  a will, the personal representative should distribute the property of  the estate in accordance with the provisions of the will. If there is no  will, the property of the estate will be distributed according to  intestate succession laws. The law generally provides that, absent a  will, your estate will pass to your spouse. However, in situations where  either spouse has children from other marriages, the share awarded to  the spouse may be less than the entire estate. If your spouse is not  alive, your estate will pass to your children in equal shares. If there  are no children, the estate will pass to other relatives. Sometimes,  relatives cannot be located or traced. In this case, assets of the  estate that cannot be distributed are deposited with the county  treasurer until claimed.


Trusts


A trust is  an entity that manages the distribution of your assets. A trust is  created by the transfer of property by the owner (also called a  “grantor,” “donor,” or “settlor”) to another person (the trustee). A  trustee can be a professional with a financial knowledge, a relative or  friend, or a professional trust company. The trustee holds title to the  property for the benefit of the beneficiaries who may be a specific  person, a group of people or an organization.


There are  two basic types of trust. A “testamentary” or “after-death trust” is  created by the settlor’s will which transfers property to the trust. A  “living” or “intervivos trust” is created during the lifetime of the  grantor when all or part of the grantor’s property is transferred into  the trust.


Establishing a Trust


Establishing  a trust requires a document that specifies your wishes, lists  beneficiaries, names a trustee or trustees to manage the assets and  describes what the trustee or trustees may do. For a living trust, you  can name yourself as trustee but, if you do, you should also name a  successor trustee to take over if you should become disabled or die.  Once the document is completed, you must then transfer the assets to the  trust. Please keep in mind that in some instances, such as the transfer  of real estate, there may be associated fees or tax consequences. 


If the  living trust contains all of your property, a will may be unnecessary  and you can avoid probate. If the trust contains only part of your  property, you will need a will for the rest of it. If you want your  property to go into the trust after you death, your will should include a  “pour-over” provision to put the remaining property into the trust upon  your death. If the assets are not placed into a trust and are disposed  of by a will, they will have to probated, which would negate the  advantages of the living trust. 

As you can  see, the issues surrounding wills, trusts, and the probating of an  estate can be quite complex. An individual would be well-advised to seek  the assistance of an attorney. To that end, I would be happy to provide  you with a free consultation regarding these very important matters

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