Estate planning is the process of anticipating and arranging for the management and/or disposition of an estate through the use of financial powers of attorney, health care directives (a.k.a. “health care powers of attorney” or a “living will”), wills, trusts, beneficiary designations, property ownership, transfer on death deeds (TODD), and other estate planning tools. It is getting your affairs in order to prepare for the possibility of incapacity and eventual death.
Proper estate planning can narrow down the possibility of uncertainties when it comes to distribution of an estate and can increase the value of the estate by minimizing the risk of certain kinds of taxes and other expenses.
Through the use of wills and trusts, you can designate to whom you wish your assets to go and even when the distribution will be made: whether immediately after death, or spread throughout a period of years.
Some examples of certain properties and assets you may wish to distribute to your beneficiaries include the following:
- Real property (and things attached to it: houses, barns, sheds, garages, etc.)
- Personal property (including furniture, automobiles, boats, etc.)
- Accounts, stocks and bonds, and retirement plan benefits
- Jewelry, art, antiques, and collectibles
- All businesses and business interests
- Life insurance, pension benefits, and pension plans
Estate planning is also a good process for laying out your final wishes or requests. For example, in a health care directive (a.k.a. a “living will”), you may wish to control certain medical matters if you are ill and can no longer express your wishes. You can also appoint a guardian in your will to care for any children or person under your authority who is otherwise incapable of caring for themselves. In a power of attorney, you may appoint someone to handle your financial affairs while you are incapacitated.
Many people wonder when the best time to begin their estate planning. The answer is now, while you are capable of making these difficult decisions. If you become incapacitated or pass away before putting your plans in place, there is no certainty your estate will be distributed in the manner you wish.
Wills, Trusts, & Living Trusts
A will is a set of instructions whereby you direct the distribution of your assets at your death. Without having a will in place, in the event of your death, the court may have the ultimate decision as to where your assets and/or other valuables will go.
In your will, you may name certain persons to inherit certain property you own such as real estate, vehicles, antiques or collectibles, jewelry, etc. You may also name who is to receive the remainder of your estate and in what share they are to receive such assets. Typically, you will name more than one beneficiary to receive your assets in case one or more are not able, deceased, or you simply want to split your assets between more than one person.
A beneficiary is a person who receives benefits from a will or trust. For example, if you leave one of your assets to your child in your will or trust, that child is a beneficiary of that will or trust.
Wills also can contain last wishes of the will holder and may name certain guardians for minor children. You will name who you wish to be the administrator/executor of your estate: in other words, who will be in charge of carrying out your wishes, as stated in your will, upon your death.
Again, without a will in place, the court may have the ultimate decision as to where your assets and/or other valuables go upon your death, who will become the legal guardian of your minor children, and who should be in charge of administering your estate.
A trust is a document which contains certain arrangements whereby the trust holder (the trustee) legally holds title of property “in trust” for the benefit of another person (the beneficiary). If a trust is properly funded and written, it can also be a useful tool to avoid a probate proceeding of your estate upon your death.
You can choose to be your own trustee, which entitles you to complete ownership of all property held in trust. You will name a successor trustee who will have a fiduciary responsibility to administer the trust upon your incapacity or death, solely in the interest of the beneficiary. Your assets will be held by the trustee until such time as the trust directs for their disbursement.
In a trust you will name beneficiaries of your estate, what they will take from your estate, and when you desire their shares to be distributed. If you have minor children or children with special needs, you may establish provisions as to when such a child is to receive his or her share.
Estate & Trust Administration
Estate and trust administration is the management and settling of the estate of a deceased person. Estate and trust administration may or may not involve a probate proceeding. After the death of a family member or friend, there are many obligations to be handled that carry personal liability if you are the administrator (personal representative or executor) or trustee of an estate. The responsibilities can be overwhelming and daunting.
The administrator or trustee is responsible for carrying out the wishes of the decedent as directed in the will or trust. It may involve collecting and protecting assets; valuation of assets; transferring assets to the estate, trust, or a named person or entity; preparing a formal inventory for the beneficiaries/heirs of the will or trust; filing federal and state tax returns; resolving debts of the decedent; preparing a final accounting, distribution, and division of assets, etc.
Every estate is different and can be from large and complex to modest and uncomplicated. Our firm is experienced in the issues that often arise during estate and trust administration and can provide advice and counsel on your situation. Our lawyers can assist you with your duties or we can do the work for you. Our firm also represents those named as beneficiaries or heirs in wills and trusts to protect their rights as well.
Probate is the legal process of transferring and distributing probate assets and resolving all claims against an estate after a person’s death whether there was a will or not.
Probate assets are those assets which the deceased person owned and which are titled in his/her name alone and without beneficiary designations. Non-probate assets are those assets which are held jointly with right of survivorship where other owners survive, or with beneficiary designations, or with transferable on death designations, or with payable on death designations.
If the probate estate exceeds a certain amount of money ($50,000 or more in the State of Minnesota and $50,000 or more in the State of Wisconsin), or real estate is owned by the deceased person alone, then those assets may be subject to probate.
If you are the appointed personal representative or nominated personal representative (or executor) of an estate, we can help you carry out your duties and settle the estate, or we can take on the burden for you. Probate is a complex body of law and can be overwhelming without the help of an experienced attorney on your side.
We also represent beneficiaries or heirs who may want to make sure they are being treated fairly and assets are distributed properly. Unfortunately, the death of a loved one can lead to disagreement even among the closest of families.
Guardianships & Conservatorships
In a guardianship or conservatorship, a person who is usually under a disability, called the ward, is determined by the court to be unable to manage his or her own affairs. On a guardianship, the guardian is responsible for the decision making for the ward regarding medical care, place of residence, and other matters pertaining to the physical needs of the ward.
A conservator is responsible for making decisions about the assets and liabilities of the ward such as managing investments, paying bills, and even making gifts. Conservators and guardians are appointed by the court after the court ascertains that the proposed person is capable of making the decisions and has a background that will withstand scrutiny. Usually a criminal background check is done and fingerprints are taken of proposed conservators and guardians.
The main objective of conservatorships and guardianships is the well-being and best interests of the ward. The appointed conservator or guardian must file an annual report with the court and notify the ward of their right to approach the court toterminate the guardianship or conservatorship.
Elder law focuses on the legal issues that are unique to seniors and vulnerable adults and recognizes that unique issues or needs may arise when attorneys represent these individuals in other practice areas. For example, the Minnesota Vulnerable Adult Act applies to many individuals simply based upon their status or residence. However, when assisting senior, elderly, or vulnerable clients with drafting estate planning documents (such as a will) or entering real estate transactions (such as a life estate), an attorney must also consider the effect of other laws upon those actions, such as medical assistance rules.
One goal of elder law is to prevent elder abuse, which has become a great concern to many people. Sadly, many seniors, elderly adults, and vulnerable adults have fallen victim to financial exploitation by relatives, caregivers, and scam or con artists who prey upon these populations. Mortgage companies and the financial sector have also created several products, such as the reverse mortgage, which may work well for some but not for everyone. Many of the laws which cover these issues create two separate avenues of relief: there may be a private right of action for the victim against the individual abuser (with the victim recovering money damages) as well as a public one (with the local government taking action against the offending business or facility, such as imposing fines or revoking operations permits or licenses).
Another goal of elder law is to assist these individuals as they plan ahead for their future. Depending upon their situation, we counsel clients on ways to insure against the rising cost of long term medical and nursing home care. If you or your spouse is a veteran, veteran’s benefits from the Veterans Administration (VA) may also be available to defray some of these costs. Many clients are also concerned with how to properly “spend down” their property and assets without jeopardizing eligibility for medical assistance. We also help clients weigh their options regarding property or asset transfers (and kinds of property ownership) when making gifts to children and other loved ones, especially if a client may need to rely upon medical assistance at some point in the future.