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Plymouth MN Estate Planning Blog

Wednesday, May 15, 2013

Estate Planning Don’ts

Preparing for the future is an uncertain business, but there are steps you can take during your lifetime to simplify matters for your loved ones after you pass, and to ensure your final wishes are carried out. Planning for what happens to your property, or who cares for your family members, upon your death can be a complicated process. To simplify things, we’ve created the following list to help you avoid some of the pitfalls you may encounter before, or even long after, you create your estate plan.
Read more . . .


Wednesday, May 1, 2013

6 Events Which May Require a Change in Your Estate Plan

Creating a Will is not a one-time event. You should review your will periodically, to ensure it is up to date, and make necessary changes if your personal situation, or that of your executor or beneficiaries, has changed. There are a number of life-changing events that require your Will to be revised, including:
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Thursday, April 25, 2013

Advance Planning Can Help Relieve the Worries of Alzheimer’s Disease

The “ostrich syndrome” is part of human nature; it’s unpleasant to observe that which frightens us.  However, pulling our heads from the sand and making preparations for frightening possibilities can provide significant emotional and psychological relief from fear.


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Thursday, April 25, 2013

Changing Uses for Bypass Trusts

 

Every year, each individual who dies in the U.S. can leave a certain amount of money to his or her heirs before facing any federal estate taxes. For example, in 2010, a person who died could leave $3.5 million to his or her heirs (or a charity) estate tax free, and everything over that amount would be taxable by the federal government. Transfers at death to a spouse are not taxable.

Therefore, if a husband died owning $5 million in assets in 2010 and passed everything to his wife, that transfer was not taxable because transfers to spouses at death are not taxable. However, if the wife died later that year owning that $5 million in assets, everything over $3.5 million (her exemption amount) would be taxable by the federal government. Couples would effectively only have the use of one exemption amount unless they did some special planning, or left a chunk of their property to someone other than their spouse.

Estate tax law provided a tool called “bypass trusts” that would allow a spouse to leave an inheritance to the surviving spouse in a special trust. That trust would be taxable and would use up the exemption amount of the first spouse to die. However, the remaining spouse would be able to use the property in that bypass trust to live on, and would also have the use of his or her exemption amount when he or she passed. This planning technique effectively allowed couples to combine their exemption amounts.

In late 2010, Congress changed the estate tax rules. For 2013, each person who dies can pass $5.25 million free from federal estate taxes. In addition, spouses can combine their exemption amounts without requiring a bypass trust (making the exemptions “portable” between spouses). This change in the law appears to make bypass trusts useless, at least until Congress decides to remove the portability provision from the estate tax law. (Please note that Minnesota has an estate tax exemption amount of $1 million.

However, bypass trusts can still be valuable in many situations, such as:

(1)  Remarriage or blended families. You may be concerned that your spouse will remarry and cut the children out of the will after you are gone. Or, you may have a blended family and you may fear that your spouse will disinherit your children in favor of his or her children after you pass. A bypass trust would allow the surviving spouse to have access to the money to live on during life, while providing that everything goes to the children at the surviving spouse’s death.

(2)  State estate taxes. Currently, 13 states as well as Washington D.C. have state estate taxes.  This includes Minneosta.  Therefore, a bypass trust is still a very valuable tool that allows a couple to shield $2million from state estate taxes.

(3)  Changes in the estate tax law. Estate tax laws have been in flux over the past several years. What if you did an estate plan assuming that bypass trusts were unnecessary, Congress removed the portability provision, and you neglected to update your estate plan? You could be paying thousands or even millions of dollars in taxes that you could have saved by using a bypass trust.

(4)  Protecting assets from creditors. If you leave a large inheritance outright to your spouse and children, and a creditor appears on the scene, the creditor may be able to seize all the money. Although many people think that will not happen to their family, divorces, bankruptcies, personal injury lawsuits, and hard economic times can unexpectedly result in a large monetary judgment against a family member.

In conclusion, there are still many situations in which bypass trusts can be invaluable tools to help families avoid estate taxes.


Wednesday, April 17, 2013

Estate Planning Don’ts

Preparing for the future is an uncertain business, but there are steps you can take during your lifetime to simplify matters for your loved ones after you pass, and to ensure your final wishes are carried out. Planning for what happens to your property, or who cares for your family members, upon your death can be a complicated process. To simplify things, we’ve created the following list to help you avoid some of the pitfalls you may encounter before, or even long after, you create your estate plan.


Read more . . .


Sunday, March 31, 2013

Senior Citizens Comprise Growing Demographic of Bankruptcy Filers

It’s called your “golden years” but for many seniors and baby boomers, there is no gold and retirement savings are too often insufficient to maintain even basic living standards of retirees. In fact, a recent study by the University of Michigan found that baby boomers are the fastest growing age group filing for bankruptcy. And even for those who have not yet filed for bankruptcy, a lack of retirement savings greatly troubles many who face their final years with fear and uncertainty.
Read more . . .


Tuesday, March 26, 2013

Do I Really Need Advance Directives for Health Care?

Many people are confused by advance directives. They are unsure what type of directives are out there, and whether they even need directives at all, especially if they are young. There are several types of advance directives. One is a living will, which communicates what type of life support and medical treatments, such as ventilators or a feeding tube, you wish to receive. Another type is called a health care power of attorney. In a health care power of attorney, you give someone the power to make health care decisions for you in the event are unable to do so for yourself. A third type of advance directive for health care is a do not resuscitate order. A DNR order is a request that you not receive CPR if your heart stops beating or you stop breathing. Depending on the laws in your state, the health care form you execute could include all three types of health care directives, or you may do each individually.
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Wednesday, March 20, 2013

Beware of “Simple” Estate Plans

“I just need a simple will.”  It’s a phrase estate planning attorneys hear practically every other day.   From the client’s perspective, there’s no reason to do anything complicated, especially if it might lead to higher legal fees.  Unfortunately, what may appear to be a “simple” estate is all too often rife with complications that, if not addressed during the planning process, can create a nightmare for you and your heirs at some point in the future. 


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Thursday, June 7, 2012

4 Legal Documents To Amend After Your Divorce in Minnesota

4 Legal Documents To Amend After Your Divorce

The high divorce rate in Minneapolis & St. Paul and beyond has some interesting ramifications for estate planning lawyers.  While your will, trust, and medical directives may not be the first things that come to mind during the often heart-wrenching process of divorce, they are something that truly needs to be considered.

‘Til Death Do Us Part

You undoubtedly meant this vow seriously when you made it, but we all know that circumstances change.  Unfortunately, if you don’t make it happen, your will and other Minnesota estate planning documents do not change automatically.  It may seem obvious that you would not want your ex-spouse to be the executor of your will or to handle the dispersal of your assets, but if that’s what your will directs, then that is exactly what must legally happen.

Even if you haven’t been married for years, if your will, healthcare directives, power of attorney, etc. still list your ex in an authority position, then he or she is still designated to take on that role.  This can become quite tricky in situations where the divorce was not amicable. 

Another problem can arise if the ex-spouse remarries.  If you haven’t updated your estate planning documents after the divorce, then it’s likely that your former spouse, rather than your children, will still be the main beneficiary.  If he or she has remarried and then passes away, your assets could possibly pass to the new spouse and his or her children!  This is not a scenario that many parents want to consider, but it definitely happens.

The Big Four

Even as the ink is drying on the divorce decree, it is in your best interest to update at least these four estate planning documents:

  • Last Will and Testament – Again, you likely don’t want your ex-spouse to be in charge of your affairs upon your death.  It is a good idea to name a new executor and rethink who your beneficiaries should be.  If you have any trusts set up, it is time to amend them, as well.
  • Powers of Attorney – These types of legal documents determine who will be in charge of things such as your finances should you become unable to take care of them yourself.  Many people would shudder at the very idea of their exes having control over paying their bills, meeting their living expenses, etc.  The power of attorney gives the named party significant financial power, and it is generally wise to revoke that as soon as possible.
  • Healthcare Directives – Your healthcare directives name the party who you have designated to make medical decisions on your behalf if you are not able to do so yourself.  Your ex-spouse would be responsible for making life-or-death decisions for you. 
  • Beneficiary Designations – Most insurance policies, bank accounts, etc. include the designation of a beneficiary.  This is the person who receives all or some of the money from that policy or account upon your death.  It is easy to forget about these things, but if you don’t update them after the divorce, your money will legally belong to your ex-spouse.

If you live in Plymouth, Wayzata, Minneapolis or the surrounding suburbs  then you will want to work with a local estate planning lawyer upon your divorce to ensure that you are getting your affairs set up to match your new life.  Give our office a call to ensure your documents are properly amended and your post-divorce ducks are in a row.


Wednesday, March 14, 2012

Frequently Asked Questions About Probate In Hennepin County, Anoka County and Ramsey County

Probate lawyers in the twin cities metro area counties understand that while we’re well-versed in the topic, it is a whole new world to most of our clients.  That means that you likely have lots of questions that you need answered.  Fortunately, answering those questions is exactly what we do!

Do the Hennepin, Anoka or Ramsey County Probate Courts Have to Be Involved?

One of the most common questions asked when someone dies without a will is whether or not the courts must be involved.  The short answer to this is “yes.”  While rules differ depending on the county involved, A probate lawyer can help to guide the estate through the process.

The probate court’s job is to ensure that the decedent’s affairs are legally concluded.  This typically means that someone is appointed to be in charge of the estate and follow through with transferring property to heirs as deemed appropriate.  In addition, court fees, estate taxes, creditors, and all other applicable costs will be paid out of the estate.  When this person is named by the courts, he or she is usually either referred to as the personal representative or the administrator.

Who Inherits the Estate?

When an estate goes into probate in Hennepin county, the proper division of property is determined by the courts.  Each state can have its own laws in regards to how the property is divided, so working with a probate attorney in Minnesota is the best way to ensure you understand what applies in your case.

The most common method of distribution is for property to go to family members.  Most states, after paying the associated fees and other outstanding costs, will award money and property first to a current spouse and children of the decedent.  If this person is unmarried and/or without children, the estate will likely go to parents, with siblings, grandparents, and aunts and uncles falling in line after those.  In cases where no family members are found, the estate can become property of the state.

How Can I Avoid Probate in Minnesota?

The best way to avoid probate, of course, is to plan.  A probate lawyer or estate planning attorney in Minneapolis can help you determine your needs and goals and get you set up with the right documentation to make sure that your wishes are outlined well in advance.  That way, you make the decisions about your estate, instead of leaving it in the hands of the courts.

 

 

 


Sunday, February 19, 2012

The Probate Process

A Minneapolis Probate Lawyer Gives Provides a Quick Overview of the Probate Process

In some circles, “probate” almost feels like a dirty word.  There are plenty of reasons that a person may prefer to skip the probate process, when possible, but it is a fact of wills and trust administration.  The details of probate can vary somewhat from place to place, even county to county. There are different requirements even between Hennepin County and Ramsey County probate procedure. Additionally, probate in California will likely be different than probate in Minnesota.  There are such differences, in fact, that separate proceedings are necessary for an individual with estates and real estate in both states.  This means that involving a probate lawyer from Minneapolis and St. Paul is usually the best choice for those who are local.

The process of probate is used to ensure that an individual’s estate is being administered in a way that conforms with probate laws.  This is one of the reasons that a qualified probate lawyer can make such a difference.  He or she can help family members and other heirs navigate the process and ensure that all steps are being completed properly.

Many of those who engage in estate planning do their best to avoid probate by creating a revocable living trust.   This helps to set out their wishes in advance and allows for a trustee to follow through on those wishes when the time comes.  Those who simply have a will and those who have not planned their estates at all will have their assets go into probate.

One of the biggest concerns about probate is the fact that it is a public affair.  Because the will or estate goes through the court system, the information that arises is available to the public.  While this may not be a major concern for some people, others prefer to keep matters of money, property, and inheritance private.

Another common concern is the cost.  A considerable amount (anywhere up to four percent) of the gross of an estate may go to the courts.  A similar amount will be paid in attorney’s fees.  For some people, these fees are negligible, but in many cases, these costs significantly affect the overall inheritance.

Finally, if you are involved with an estate that is going into probate in Hennepin, Ramsey, or another metro area county, it is important to be aware that it can be a lengthy process.  An opening procedure must be conducted with the court, notice must be given to interested persons and creditors, an accounting of assets is completed, creditors must be contacted regarding any money owed, and assets may need to be sold off.  All of these things take time.

 A good probate lawyer will have experience with this process making it smoother.  He or she will also understand the concerns of those involved and will keep clients up to date and informed on the status of their case.  While a wills and trust lawyer is a great contact point during estate planning, a Minneapolis probate lawyer may very well be needed as the estate is actually being administered.

At StoneLAW, PLLC we are here to assist you with your probate and estate administration needs.  It is our goal to make navigating the complicated world of probate as easy as possible and help you carry out the wishes of your deceased loved one.   If you have specific questions or you are not sure how to get started with the probate process, please give our office a call at 763-231-7884. 


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