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Dying Without a Will

Tuesday, November 05, 2013

19 Smart Ways to Protect Your Assets

Minneapolis Estate Planning and Probate Lawyer Explains How to Protect Your Assets

Smart Way #1: Make a promise to yourself -- now.  Make a personal commitment to yourself and your family that you will do everything possible to protect your family and your assets.

Smart Way #2: Identify your personal and financial goals.  If you could have anything you want, personally and financially, what would it be?  What are your dreams?  How do you and your spouse want to spend your retirement years?

Smart Way #3: Discover which tools you can use to achieve those goals.  You have many legal tools at your disposal that, when used correctly, will create exactly the plan you want for yourself and your family.  Ask your estate planning attorney to explain the tools that will achieve your personal and financial goals.

Smart Way #4: Avoid probate and the Court system, as appropriate.  Create a family estate plan that, upon your death, distributes your assets to your heirs without going through the Court-supervised process called probate.  Most often a Revocable Living Trust is used for this purpose.

Smart Way #5: Reduce income taxes whenever possible.  Create a family asset protection plan that eliminates unnecessary income and capital gains taxes and minimizes all other taxes.  Without proper planning, much of your estate can be lost to various types of taxes.

Smart Way #6: Protect yourself with insurance.  Lawsuits can quickly tie up your assets.  And if the other party wins the lawsuit, the judgment against you could quickly deplete your funds.  If you drive frequently, own rental property, or operate a business, buy an umbrella liability policy that protects your assets from lawsuits.

Smart Way #7: Provide for future health care and financial decisions.  Your family estate plan should protect you and your spouse if the time comes when either of you cannot make decisions.  Your estate planning attorney can make sure you have the legal documents in place so a competent, trusted person can make these important decisions according to your wishes.

Smart Way #8: Plan now to fund nursing home care.  Sadly, many people think the only way they can pay for their nursing home care is by spending down their estate.  But, in fact, you can fund your long-term care in ways that do not require that you spend down your estate.  One common way is with long-term care insurance.  Don’t wait until it’s too late to decide how to fund your nursing home care.  Do it now, long before you need it.

Smart Way #9: Pay close attention to Alzheimer’s disease and its associated costs -- even if you have no reason to worry about it.  Many people who never expect Alzheimer’s disease to strike have had to face its problems with no advance planning.  So, plan for Alzheimer’s disease now, while you have time.  This includes the need to address issues of backup decision-makers, assisted living, and nursing home care.  If your children can care for you later in life, that’s fine.  If they cannot, your advance planning will pay big dividends.  Plan for the worst -- and hope for the best.  Then, in either case, you will have all your bases covered.

Smart Way #10: Keep all control within your family.  If you don’t plan properly, you could find that a friend or relative has petitioned the Court to intervene on your behalf.  Once a judge gets involved, you have ongoing legal and accounting expenses, plus more problems and hassles than you would ever want to endure.  The smart way to plan for your later years is to keep total control within your family.
Smart Way #11: Create your plan now, while everyone involved is competent to make decisions.  Seniors often come to our office seeking help only to learn that they are too late to correct a terrible situation.  We feel awful when we must tell them that the much-needed planning should have been done two, five or ten years earlier.  Don’t wait until you need help to create your plan.  By then, it’s too late.

Smart Way #12: Review your plan at least once a year.  Every time your circumstances change or your goals change, you should change your estate plan.  If your plan is not up to date, the unintended consequences to you and your family could be disastrous.  Make an appointment at least every year to meet with your estate planning attorney.  Then you can go over your plan and discuss any changes in your life circumstances.

Smart Way #13: Make proper decisions concerning your retirement benefit distributions.  Make sure your estate plan maximizes income-tax-free deferrals and minimizes income and estate taxes.  

Smart Way #14: Work closely with your physician about your Medicare coverage.  Often skilled nursing services and home health coverage are terminated or denied with little or no input from your treating physician.  Before you go without health care that could be covered by Medicare, talk with your physician about your concerns so that he or she can help you get the Medicare coverage you deserve.

Smart Way #15: Think about future housing options.  Start from the perspective of where you would like to live.  Then determine if you could afford this option by comparing your monthly income along with your life savings to the initial cost and the ongoing financial commitment you would have to make.  Make sure you consider (1) your healthcare needs that will not be covered by insurance, (2) financial security for your surviving spouse, and (3) your desire to pass on a legacy to your children.

Smart Way #16: If you are in a second marriage, decide how you will handle the high cost of nursing home care.  If you are not able to pay $5,000 per month to a nursing home and want your children from an earlier marriage to receive your property, a Marital Agreement alone will not do the trick.  Medicaid ignores these contracts and considers all of the couple’s assets, whether owned jointly or individually, in determining Medicaid eligibility.  A better choice is to include in your Marital Agreement a provision that requires each spouse to obtain and maintain long-term care insurance.  Also, you can include additional provisions that clearly state that the healthy spouse is able to take all necessary steps to protect his or her separate property from a Medicaid “spend-down.”

Smart Way #17: Keep the lines of communication open within your family.  If one of your children will be managing your finances, you should take specific steps to help him or her avoid conflict within your family.  Insist that your child disclose to other family members what has been done on your behalf.  You can do this by adding this instruction to your Trust or General Durable Power of Attorney.  By doing this you accomplish two things: One, you keep everyone in the loop so feelings of distrust are eliminated.  And two, you reduce the risks of financial abuse because other family members will know how your finances are being managed.

Smart Way #18: Don’t let incapacity put your family at risk for criminal or social worker investigations.  Many professionals are responsible for protecting frail and elderly people from predators.  If your legal documents don’t provide clear legal authority and guidance on how to manage your assets, the police or adult protective services could step in and question your children’s actions and motives.  If authorities investigate your children’s actions, at worst, they could file criminal charges.  At best, an investigation by adult protective services could return a “finding” of no current financial abuse.  You can eliminate these risks to your children -- and avoid becoming a burden to your children -- with a competent estate plan.

Smart Way #19: Hire a competent, experienced estate planning attorney to create an estate plan.  The areas of estate planning and elder law are far too complex to hire just any attorney.  Often, strategies used in estate planning to minimize taxes directly conflict with strategies used in elder law planning to protect assets and achieve Medicaid eligibility for nursing home care.  In situations where both goals are important, you and your family need a lawyer who has in-depth knowledge and experience with both sets of rules and strategies.  Most attorneys are not qualified to provide these services.  Make sure the estate planning attorney you hire has the knowledge, skill, judgment, and experience to create a competent plan for you and your family.


Monday, October 14, 2013

Helping the Family Prepare for Loved Ones in Advancing Age

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.

When it comes to Alzheimer’s disease and other forms of dementia, more Americans fear being unable to care for themselves and burdening others with their care than they fear the actual loss of memory.  This data comes from an October 2012 study by Home Instead Senior Care, in which 68 percent of 1,200 survey respondents ranked fear of incapacity higher than the fear of lost memories (32 percent).

Advance planning for incapacity is a legal process that can lessen the fear that you may become a burden to your loved ones later in life.

What is advance planning for incapacity?

Under the American legal system, competent adults can make their own legally binding arrangements for future health care and financial decisions.  Adults can also take steps to organize their finances to increase their likelihood of eligibility for federal aid programs in the event they become incapacitated due to Alzheimer’s disease or other forms of dementia.

The individual components of advance incapacity planning interconnect with one another, and most experts recommend seeking advice from a qualified estate planning or elder law attorney.

What are the steps of advance planning for incapacity?

Depending on your unique circumstances, planning for incapacity may include additional steps beyond those listed below.  This is one of the reasons experts recommend consulting a knowledgeable elder law lawyer with experience in your state.
 

  1. Write a health care directive, or living will.  Your living will describes your preferences regarding end of life care, resuscitation, and hospice care.  After you have written and signed the directive, make sure to file copies with your health care providers.
     
  2. Write a health care power of attorney.  A health care power of attorney form designates another person to make health care decisions on your behalf should you become incapacitated and unable to make decisions for yourself.  You may be able to designate your health care power of attorney in your health care directive document, or you may need to complete a separate form.  File copies of this form with your doctors and hospitals, and give a copy to the person or persons whom you have designated.
     
  3. Write a financial power of attorney.  Like a health care power of attorney, a financial power of attorney assigns another person the right to make financial decisions on your behalf in the event of incapacity.  The power of attorney can be temporary or permanent, depending on your wishes.  File copies of this form with all your financial institutions and give copies to the people you designate to act on your behalf.
     
  4. Plan in advance for Medicaid eligibility.  Long-term care payment assistance is among the most important Medicaid benefits.  To qualify for Medicaid, you must have limited assets.  To reduce the likelihood of ineligibility, you can use certain legal procedures, like trusts, to distribute your assets in a way that they will not interfere with your eligibility.  The elder law attorney you consult with regarding Medicaid eligibility planning can also advise you on Medicaid copayment planning and Medicaid estate recovery planning.

Monday, September 30, 2013

12 Problems That Could Cost Your Family a Fortune – and Their Solutions

Minnesota Estate Planning Attorney Discusses Frequent Issues/Concerns that Arise When Handling Someone's Estate

Problem #1: Probate. Probate is the Court-supervised process of passing title and ownership of a deceased person’s property to his or her heirs. The process consists of assembling assets, giving notice to creditors, paying bills and taxes, and passing title to property when the judge signs the order. Probate can cost your loved ones a sizeable portion of your estate. The biggest portion of the costs are the fees charged by attorneys and personal representatives for their services for the estate, in addition to filing fees, costs of publication, fees for copies of death certificates, filing and recording fees, bond premiums, appraisal and accounting fees, and so on. Often the fees of attorneys and personal representatives are based on a hourly rate, and while they can tell you what their hourly rate is, they cannot tell you the number of hours their services will take, so they cannot tell you what their total fees will be. Like surgery, probate can be simple and easy, but frequently probate can have very drastic and damaging results. Accordingly, like surgery, because of its uncertainty in terms of both the potential for problems and high costs and fees, probate is something best to prepare for if you can. You can avoid a substantially larger probate process by having an estate planning lawyer set up and fund a Revocable Living Trust. Since the Trust actually owns your assets, no significant probate of the estate will be required, saving your family many thousands of dollars.

Problem #2: Lawsuits and Creditors. Protect the property you leave to your partner/spouse and children from the claims of their creditors, ex-spouses, and the IRS. This can best be done with proper creditor protection provisions in a Revocable Living Trust.

Problem #3: Estate Taxes. For married couples, protect your assets from state and federal estate taxes by setting up and funding a tax-saving Credit Shelter Trust. Under current law, a Credit Shelter Trust will completely protect your assets from estate taxes for estates valued up to a certain amount will have to pay federal estate taxes. What is that amount? No one knows right now. The current exemption is $5,000,000 a person or $10,000,000 for a married couple.

Further, in Minnesota, the estate limit is $1,000,000 so your estate will pay taxes TO THE STATE for anything over $1,000,000. The tax rates generally comes out to 10% of the assets over that 1,000,000 mark.

Most couples don’t realize that the value of their estate for purposes of determining estate taxes includes their life insurance death benefit proceeds. Your estate includes EVERY asset you own at the time of death: real estate; cash, stocks, bonds, life insurance, retirement accounts, automobiles and personal property. It is not difficult to reach the $1,000,000 mark once all these assets are added up.

A well-designed estate plan costing between $3,000 and $6,000 will save a significant amount in federal estate taxes. Other ways you can avoid or reduce estate taxes include setting up (1) an Irrevocable Trust for your children, grandchildren or other heirs, (2) an Irrevocable Life Insurance Trust, (which detaches your life insurance benefits from your estate), (3) a Charitable Remainder Trust, and (4) Second-to-die Life Insurance so you can pay estate taxes for pennies on the dollar.

Problem #4: Income Taxes. A family can lower its overall income taxes by setting up a Family Limited Partnership to own income-producing property. A parent can do this by setting up a Family Limited Partnership and making gifts of limited partnership interests to the other limited partners, normally their children or grandchildren who pay income tax at lower tax rates. A Family Limited Partnership is an excellent tool to shift income to partners who pay taxes at lower rates. It is also an effective way to make gifts and still keep total control of the property owned by the partnership.

Problem #5: Lawsuits. Protect your assets from lawsuits by doing any or all of the following, as appropriate: (1) purchasing an umbrella liability insurance policy, (2) setting up a Family Limited Partnership, (3) setting up a program for lifetime gifting, (4) setting up a Limited Liability Company, and (5) incorporating. Further, you can protect your children from lawsuits by putting their inheritances into a Discretionary Trust. This is especially important if your children are likely to become professionals subject to potential malpractice actions or, on the other hand, are spendthrifts!

Problem #6: Inexperienced Beneficiaries. Protect your assets from being wasted by young or inexperienced family members. Most beneficiaries spend their entire inheritances in less than two years, regardless of the size of the estate or the heir’s socio-economic background. Your lawyer can set up your Family Trust with protective provisions that provide guidance and safeguard your life savings.

Problem #7: Guardianships. Protect your assets from the high costs of incapacity by (1) setting up a Living Trust so you avoid the need for a guardianship, (2) drawing up an Advance Healthcare Directive, and (3) drawing up a Health Care Power of Attorney.

Problem #8: Nursing Home Care. Protect joint assets from the high costs of nursing home care. Buy insurance that covers nursing home care and provides a death benefit that returns the money spent on nursing home care to your heirs.

Problem #9: Unwanted Medical Care. Protect your assets from unwanted and costly medical care by having an Advance Healthcare Directive and Health Care Powers of Attorney that spell out your instructions, including which medical care, treatment and procedures you want -- and which you don’t want.

Problem #10: Unwanted Emergency Care. Protect your assets from unwanted emergency care. If you have a terminal illness, you can draw up and sign a Pre-hospital Medical Directive that will tell emergency personnel not to resuscitate you in the event of a medical emergency. This directive is often referred to as a “Do Not Resuscitate Order”.

Problem #11: Ineffective Estate Plans. Protect your assets from an ineffective estate plan. Don’t depend on pre-printed “cookie cutter” form kits or document preparation services for your estate plan. Contrary to what you may have heard or read, one size does not fit all! You may think you have precisely what you need. But you will never know -- because your family members will have to clean up the mess. You see, after you die, your family members will try to use your documents to settle your estate. And if the documents weren’t drafted correctly, they will cause additional expense and long delays because a probate will have to be done to convey title to your assets.

Problem #12: Unqualified Lawyers. Many attorneys are getting into estate planning because it’s less stressful than other areas of law. Not surprisingly, most of these newcomers focus on the needs of senior citizens and almost never deal with issues affecting young families. If you have young children, make sure you choose an independent attorney who focuses their law practice on asset protection and estate planning for young families. This will help insure that the lawyer you choose has the knowl­edge, skill, experience and judgment necessary to fully protect your family and your assets, and to give you advice and counsel that is in your best interests.


Monday, September 09, 2013

20 Costly Misconceptions About Wills and Trusts

Misconception #1: A Will avoids probate.  No.  A Will is the primary tool of the probate system. Your Will is like a letter to the Court telling the Court how you want your property distributed.  Then you must make sure that you prove to the Court that all your property is collected and appraised, and all your bills and taxes are paid, before your property can be distributed to your heirs.

Misconception #2: A Testamentary Trust avoids probate.  No.  A Testamentary Trust is a Trust contained within a Will that holds property for a specific purpose.  For example, one purpose would be to hold property until minor children turn 18, when they can legally own property -- or until children reach the age when you believe they are mature enough to responsibly handle the property.  A Testamentary Trust is not a Revocable Living Trust.  It is part of a Will and takes effect only when the Will is probated.

Misconception #3: Probate costs and the costs of administration of the estate are small.  Not necessarily.  Such costs can be very substantial.  The real problem is, no one can tell you how much the costs will be until the probate has been completed, which often can take several years.  The biggest portion of the costs are the fees charged by attorneys and personal representatives for their services for the estate, in addition to filing fees, costs of publication, fees for copies of death certificates, filing and recording fees, bond premiums, appraisal and accounting fees, and more.  Often the fees of personal representatives are based on an hourly rate, and while they can tell you what their hourly rate is, they cannot tell you the number of hours their services will take, so they cannot tell you what their total fees will be.  Like surgery, probate can be simple and easy, but frequently probate can have drastic and damaging results.  Accordingly, like surgery, because of its uncertainty in terms of both the potential for problems and high costs and fees, probate is something best to avoid if you can.

Misconception #4: Property can be distributed according to the terms of your Will in only a few weeks.  In Minnesota, the administration usually takes 12 to 15 months.  During this time, the deceased person’s property must be inventoried and appraised.  Heirs must be notified.  Estate and inheritance taxes, if any, must be paid.  Contested claims, if any, must be settled.  Creditors must be notified and paid.  If all of this is not done before the estate is distributed to the beneficiaries of the estate, the personal representative will be personally responsible for those claims.  As a result, most personal representatives won’t distribute property until they are sure all claims have been settled.

Misconception #5: Your Will and your assets remain private.  No.  Because probate is a public legal proceeding, your estate may become a matter of public record.  This means that anyone -- including nosy neighbors and salespeople -- can go to Court to find out the balance in your savings account, the value of your stocks, even the appraised value of your diamonds.

Misconception #6: A Will helps you avoid taxes.  No.  A simple Will does nothing to lower your taxes. A Will simply tells how you want your property distributed, and who you want to act as guardian for your minor children in case you and your spouse die in a common accident.  A skilled lawyer can use a Will to plan complicated estates that require tax planning, but the cost of the complex plan will be comparable to the cost of a Revocable Living Trust plan.  Plus, the Will-based plan will still have to go through probate.

Misconception #7: Your permanent family home and your vacation home can be handled through the same probate and qualification.  Yes, but only if they are in the same state.  If you own property in different states, a second probate, called an ancillary administration, will need to be opened, which means your estate may need to hire another attorney. This will increase the overall estate administration expense.  And if you own real estate in other states, probates will need to be opened in those states as well.

Misconception #8: A Will prevents quarrels over assets.  Wrong.  Wills are among the most contested legal documents in the United States.  Today, it is common for unhappy relatives to challenge a Will.  This results in higher attorneys’ fees and even more delays.  Wills actually encourage challenges over assets because a petition must be filed in Court to probate them, which is like filing a lawsuit.  As a result, since a lawsuit has already been filed to probate the Will, a contesting party can simply file their claim in Court without instigating their own lawsuit.

Misconception #9: Estranged family members do not need to be notified of a probate if the Will excludes them from an inheritance.  In Minnesota, the Court may require that all heirs be notified of the probate even if they are excluded from the Will.  Certain aspects of the probate process can be avoided and financial responsibility can be mitigated through the use of various trusts and other types of financial planning.

Misconception #10: A Will from one state is not legal in another state.  Wrong.  If the Will is legal in the state where it was prepared, it is legal in all 50 states.  However, Wills do not travel well from state to state and should be reviewed by an attorney and very likely changed whenever you move to a new state. This is because the Will’s language may not mean the same in other states as it did in the state where it was signed.  In addition, many states require witnesses to the Will signing.  If proper procedures are not followed, you may need to produce those witnesses in order to probate the Will.

Misconception #11: A Will helps you when you become physically or mentally incapacitated.  No.  A Will is totally ineffective until death, and, therefore, does nothing to help you through incapacity and disability.  Your family or friends may have to go to Court to start costly guardianship or conservatorship proceedings.

Misconception #12: You must name your attorney as your personal representative.  No.  You may name anyone you choose.

Misconception #13: The cost of your estate plan is only the cost of drawing up the documents.  No.  The cost of your estate plan is both the cost of drafting the documents and the cost of distributing property to your heirs.  Simple Wills are less expensive to set up, but potentially expensive when they go through probate and there is qualification on the estate and estate administration.  Revocable Living Trusts may initially cost more than a simple Will, but the overall cost of settling your estate is often substantially less.

Misconception #14: Revocable Living Trusts are only for large estates.  No.  Revocable Living Trusts are for anyone who wants to avoid costly conservatorship and probate proceedings.  In appropriate cases, people with small estates can benefit from a Revocable Living Trust.  People with larger estates can benefit even more.

Misconception #15: A Revocable Living Trust is a public document.  No.  Your Revocable Living Trust can remain private because it does not have to be recorded or published in any way.  The only people who will know about your Trust are the people you choose to tell.  However, some professionals may need to review your Trust to confirm that your trustee is authorized to take a particular action.  This review is for the protection of all beneficiaries of the Trust.

Misconception #16: A Revocable Living Trust cannot be changed.  Wrong.  You can change and even revoke your Revocable Living Trust any time you wish.  The decision is entirely up to you.

Misconception #17: A Revocable Living Trust must have a separate tax return.  No.  As long as you are a trustee or co-trustee of your Revocable Living Trust, it does not need a tax return of its own.  Your personal tax return, which uses your social security number, is sufficient for the IRS.

Misconception #18: When you set up a Revocable Living Trust, you lose control of your assets.  No. When you set up your Revocable Living Trust, you simply name yourself and/or your spouse as Trust managers, called “trustees.”  In this way, you never give up control.

Misconception #19: The best way to transfer assets to your Revocable Living Trust is through a pour-over Will.  No.  A pour-over Will can be used to clean up the transfer of any miscellaneous assets to your Revocable Living Trust, but in order for that to take place, the Will must be probated for the assets to be transferred to the Revocable Living Trust.  A better course of action is to transfer the assets to your Trust while you are still healthy and able.  Not only will you get the peace of mind that comes from knowing the transfer was made properly, you will also get an accurate inventory of your estate.

Misconception #20: There are no costs associated with administering a Trust at the death of the original settlor of the Trust.  Not true.  While people commonly think that only the probate system costs money and takes time, they fail to understand that administering a Trust, distributing Trust assets to beneficiaries named in the Trust, and terminating the Trust can result in fees and costs.  Trustees may also charge fees for their service, and many trustees hire attorneys and accountants.  These costs are paid by the Trust before beneficiaries receive their inheritances.

If you have any questions or concerns relating to a will or trust, please contact our office.


Friday, August 16, 2013

What To Do When Someone Dies, Part I: What is Probate?

I often explain to people that I am a "probate lawyer" only to be met with a blank stare.  Occasionally, the statement "I don't know what that means" will accompany the blank stare. So, I decided to draft a series of posts under the "Probate" heading that will offer some general explanations and definitions.  Hopefully, this will offer some guidance to those suffering a loss who aren't sure of their next steps.

I manage a lot of unique cases and have witnessed many probate outcomes – both fair and unfair.  I’ve had the opportunity to be placed in a position where I can now see the little bumps in the road before they happen.  Before I continue onto my point about air tight wills in Part II of this series, let me run you through a few terms.  

“Probate” is simply the process of administering the estate of a deceased person, looking at all claims to money or other assets, administering monies and items fairly and as close to the wishes of the deceased as they are known through the documentation. The process can also be called "estate administration" as we are working to administer a person's estate (i.e. stuff) after death according to his or her wishes.

During the probate administration process, what is known as a “probate court” will validate and test the will (I will cover this in Part II).  Once this is completed, the court will then interpret the wishes of the deceased person and appoint the executor of the estate.  Post appointment of the executor, the probate will serve the purpose of adjudicating disputes to the will and determining the value of any claims made to the estate by outside parties.

Whenever you have outside interest in a will, you will have many probate disputes.  Your lawyer should anticipate this and work to create the most reliable will to protect your family as possible.  In Part II we will discuss measures that can be taken to protect your unique family.  As an estate lawyer who has drafted hundreds of wills, and handled numerouse probates, for many different types of family my firm is well prepared to help you with this.


Monday, August 05, 2013

Minnesota Gay Marriage and the Fall of DOMA: Should My Partner and I Get Married?

A Minneapolis Estate Planning Attorney Discusses Minnesota's New Law Allowing Gay Couples to Legally Married

Gay Couples Can Legally Marry in Minnesota

On August 1 Minnesota will become the thirtheenth state to legally recognize same-sex marriages.  Gay couples who decide to tie knot here will gain a variety of financial benefits and legal rights.

Some of the changes will be significant. Couples who marry and live in Minnesota will be able to file their state tax returns jointly. Couples who decide to marry will also be first in line to inherit their spouses’ assets, even in the absence of a will. They’ll gain an array of smaller benefits as well, down to the ability to jointly apply for a fishing license.

The Supreme Court Declares DOMA Unconstitutional

Further, the Supreme Court held that the section of the Defense of Marriage Act ("DOMA') withholding federal benefits from legally married same-sex couples was unconstitutional.  What does that mean?

This means that same-sex couple who are able to legally marry may not be denied the federal benefits provided to married heterosexual couples.

If you are thinking about getting married in Minnesota, or in one of the other jurisdictions in which gay marriage is legal, you need to think about how your new status as a married couple may affect your family with regard to both obligations and benefits.  Further, if you are already legally married in another jurisdiction, that marriage will automatically be recognized here in Minnesota. In other words, if you got married in Canada but live here, that marriage became legally valid in Minnesota at 12:01am on August 1, 2013.

I have a client who was legally married in Canada a few years ago and she said to me, "So, basically I just have to wake up on August 1 and we are legally married, right?"

I think that's a great way to phrase it.

But what does it mean

Many clients have called me to ask about how getting married may affect their estate plans - or other issues related to their day-to-day lives. This is, for our community, unchartered territory and so many people are filled with questions. These new laws affect, in part, the following things:

  • Responsibility for financial support for a spouse
  • Responsibility for decisions relating to medical care and treatment
  • Priority for appointment as conservator, guardian, or personal representative for a spouse
  • Inheritance rights upon the death of a spouse
  • The ability to designate a spouse automatically as a beneficiary to retirement
  • The ability to insure a spouse through most insurance policies (except for those governed by federal law – see next question below)
  • Survivor benefits under workers compensation laws and state or local government pensions
  • Presumptions of parentage for children born during the marriage
  • Marriage also provides for an orderly process for dissolution, spousal maintenance, parenting time, and other protections granted through the divorce process

If you have questions on these, or any other issues, related to the new gay marriage laws, feel free to contact Unique Estate Law to discuss them at your convenience.


Monday, June 24, 2013

8 Reasons Young People Should Write a Last Will and Testament

 

A Minneapolis Estate Planning Attorney Discusses the Reason Young People Should Think About Their Estate Plans

Imagine if writing a last will and testament were a pre-requisite to graduating from high school.  The graduate walks across the stage, hands the completed will to the principal, and gets the diploma in return.   It might sound strange because most 18 year olds have little in terms of assets but it’s a good idea for all adults to draft a last will and testament.

Graduation from college is another good milestone to use as a reminder to create an estate plan.  If you haven’t created a will by the time you marry – or are living with a partner in a committed relationship – then it’s fair to say you are overdue.

Think you don’t need an estate plan because you’re broke?  Not true.  Here are eight excellent reasons for young people to complete a last will and testament.  And they have very little to do with money.

You are entering the military.  Anyone entering the military, at 18 or any other age, should make sure his or her affairs are in order.  Even for an 18-year-old, that means creating a will and other basic estate planning documents like a health care directive and powers of attorney.

You received an inheritance.  You may not think of the inheritance as your asset, especially if it is held in trust for you.  But, without an estate plan, the disposition of that money will be a slow and complicated process for your surviving family members.

You own an animal.  It is common for people to include plans for their pets in their wills.  If the unthinkable were to happen and you died unexpectedly, what would happen to your beloved pet?  Better to plan ahead for your animals in the event of your death.  You can even direct the sale of specific assets, with the proceeds going to your pet’s new guardian for upkeep expenses.

You want to protect your family from red tape.  If you die without a will, your family will have to take your “estate” (whatever money and possessions you have at the time of your death) through a long court process known as probate. If you had life insurance, for example, your family would not be able to access those funds until the probate process was complete.  A couple of basic estate planning documents can keep your estate out of the probate court and get your assets into the hands of your chosen beneficiaries much more quickly.

You have social media accounts.  Many people spend a great deal of time online, conversing with friends, storing important photos and documents and even managing finances. Without instructions from you, will your family know what to do with your Facebook account, your LinkedIn account, and so forth?

You want to give money or possessions to friends or charities.  When someone dies without a will, there are laws that dictate who will receive any assets.  These recipients will include immediate family members like parents, siblings, and a spouse.  If you want to give assets to friends or to a charity, you must protect your wishes with a will.

You care about what happens to you if you are in a coma or persistent vegetative state.  We all see the stories on the news – ugly fights within families over the prostrate bodies of critically ill children or siblings or spouses.  When you write your will, write a health care directive (also called a living will) and a financial power of attorney as well.  This is especially important if you have a life partner to whom you are not married so they can make decisions on your behalf.


Sunday, March 03, 2013

Estate Planning for Gay Familes, Part I: The 4 Essential Documents

Minnesota Lawyer Lists the Critical Documents Every Same-Sex Couple Must Have.

Under current Minnesota (and Federal) law, gay couples do not have any rights to such basic things as: 1) inheriting from each other; 2) making medical decisions for each other; 3) handling financial matters for each other; 4) naming a guardian for a minor child; or 5) continuing to live in the family home if only one partner is listed on the deed.
 

  1.  Will – A will tells who should inherit your property when you pass away, who you want your executor to be, and who will become guardians of any minor children. These issues are all especially important for unmarried individuals. In most states, an unmarried partner does not have inheritance rights, so any property owned by his or her deceased partner would go to other family members. Also, in the case of many gay and lesbian couples, the living partner is not necessarily the biological or adoptive parent of any minor children, which could lead to custody disputes in an already very difficult time.  Therefore, it’s critical to nominate guardians for minor children.
     
  2. Financial power of attorney – A power of attorney (for financial matters) dictates who is authorized to manage your financial affairs in the event you become incapacitated. Otherwise, it can be very difficult or impossible for the non-disabled partner to manage the disabled partner’s affairs without going through a lengthy guardianship or conservatorship proceeding.
     
  3. Advance healthcare directive – A power of attorney for healthcare, informs caregivers as to who is responsible for making healthcare decisions for someone in the event that a person cannot make them for himself, such as in the event of a serious accident or a condition like dementia.
  4. HIPAA Waiver - allows the persons named to discuss your care with a doctor BUT not to make decisions.

If you don't have these documents, your partner may be prohibited from keeping your assets, living in your home, paying your bills, or making your medical decisions.

Call now to protect your family!


Sunday, February 24, 2013

Will or Won’t? Things a Will Won’t (or Can’t) Do

A Minnesota Estate Planning Lawyer Explains the Limitations of Using a Will to Handle Your Estate

Wills offer many benefits and are an important part of any estate plan, regardless of how much property you have. Your will can ensure that after death your property will be given to the loved ones you designate. If you have children, a will is necessary to designate a guardian for them. Without a will, the courts and probate laws will decide who inherits your property and who cares for your children. But there are certain things a will cannot accomplish.

A will has no effect on the distribution of certain types of property after your death. For example, if you own property in joint tenancy with another co-owner, your share of that property will automatically belong to the surviving joint tenant. Any contrary will provision would only be effective if all joint tenants died at the same time.

If you have named a beneficiary on your life insurance policy, those proceeds will not be subject to the terms of a will and will pass directly to your named beneficiary. Similarly, if you have named a beneficiary on your retirement accounts, including pension plans, individual retirement accounts (IRAs), 401(k) or 403(b) retirement plans, the money will be distributed directly to that named beneficiary when you pass on, regardless of any will provisions.

Brokerage accounts, including stocks and bonds, in which you have named a transfer-on-death (TOD) beneficiary will be transferred directly to the named beneficiary. Vehicles may also be titled with a TOD beneficiary, and would therefore transfer to your beneficiary, regardless of any provisions contained in your will. Similar to TODs, bank accounts may have a pay-on-death beneficiary named.

The will’s shortcomings are not limited to matters of inheritance.  A simple will cannot reduce estate taxes the way some kinds of trust plans can. Neither can a will protect the inheritance you leave your heirs from creditors. Perhaps your heirs are young and you would like to make sure they can get their inheritance at certain ages or intervals (marriage, education or having children).

A trust, not a will, is also necessary to arrange for care for a beneficiary who has special needs. A will cannot provide for long-term care arrangements for a loved one. However, a special needs trust can provide financial support for a disabled beneficiary, without risking government disability benefits.

A will cannot help you avoid probate. Assets left through a will generally must be transferred through a court-supervised probate proceeding, which can take months, or longer, at significant expense to your estate. If it’s probate you want to avoid, consider establishing a living trust to hold your significant assets.


Friday, December 28, 2012

Unique Estate Law: 2012 Wrap Up for a Nontraditional Law Firm

An Estate Planning Attorney Provides a Personal Review of 2012

The state of the firm

For Unique Estate Law 2012 was a fantastic year. The firm beat projections and I was able to assist more clients than ever before. I had referrals from a wide range of sources and a constant stream of clients coming through my website. I’ve done well enough to start advertising on a local radio station and in a local magazine. I have met many wonderful people and have given them guidance and peace of mind when facing an uncertain future.

Two major losses

But, for Chris Tymchuck, it was the worst year of my life.

Why was it such a bad year personally? In November both my Dad and Mom died within a week of each other. They were 66 and 64 respectively so it hadn’t occurred to the family that they might be gone so soon. While my father had battled cancer for 11 years he was in no worse shape in the end than in prior battles. And my Mom had never been sick a day in her life.

Why am I writing about this?

Why do I share such personal information on a law firm website? Because, it is a cautionary tale of what happens in a blended family when little or no preparation is done.

I was recently sharing my story with two clients and they said, “I can’t believe this is happening to you who spend your time making sure that people like us are ok and covered. You have to share your story with people so they understand that this can, and does, happen.” And they’re right.

I write this blog to assist clients and colleagues with things to consider when drafting estate plans for all types of families – both traditional and non-traditional – and the blog has paid off for me. I feel that, in keeping with the spirit in which I write I must use the lessons of 2012 to further education clients and colleagues through this medium. In short, to give back as the blog has given me so much.

Is it relevant to Unique Estate Law?

Why is my story relevant to this site? Because part of the reason that I specialize in non-traditional families is because I grew up in one – or several – and know the complications that come with being raised with in a complex web of interrelated (and sometimes not) people.

My parents divorced and each remarried and had kids with a subsequent spouse. In addition, my Mom remarried a third time and became a stepparent herself. So, that means I have a stepdad, stepmom, 3 half-brothers, a half-sister, a step brother and a step sister. That, of course, doesn’t include the “traditional” family members such as aunts, uncles and still-living grandparents. There are a lot of people to factor into planning, mourning and administering for someone.

I’ve spent the last couple of months grieving and assisting my family with working through the health care decisions, then memorials, estates and other issues associated with facing the illness and then death of parent. I plan to spend the next few posts discussing some of the lessons I’ve learned by being on the other side – education to practice so to speak – as my hope is to assist others to avoid some of the pitfalls we now face.

I can’t say that anything good has really come out of the losses I suffered this year but I will say that it confirmed my choice of profession. First, because I found relief in returning to work and assisting my clients and second because I feel that I use my law degree in the best possible way – to assist others to prepare for, and perhaps face, the worst times in their lives. For that I am grateful.


Monday, October 29, 2012

Minnesota Transfer on Death Deed, Part 3: How Do You Get One?

Twin Cities Estate Planning Attorney Explains the Steps Necessary to Use a Minnesota Transfer on Death Deed

If you are a property owner and wish to use a transfer on death deed (“TODD”) to transfer that property without the hassle of probate, you must

  1. Choose a beneficiary or beneficiaries
  2. Execute a valid deed that expressly states that it is effective only upon your death
  3. Record the deed in the county in which the property is located prior to your death.
  4. Pay the filing fee.

A few things to note.  If the property is jointly owned then all owners must sign the deed.  And as #3 above states, it is not enough to execute the deed - you must also record it with the proper county before your death.


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From within Hennepin County Unique Estate Law represents estate planning and elder law clients throughout Minnesota, including Minneapolis, Edina, Bloomington, St. Louis Park, Minnetonka, Plymouth, Wayzata, Maple Grove, St. Paul, and Brooklyn Park. The Minnesota law firm of Unique Estate Law focuses on all aspects of estate planning, including specialized wills, trusts, powers of attorney and medical directives for married couples, young families, blended families, single parents, gay families and those going through a divorce. Unique Estate Law also handles probate administration, asset protection, Medical Assistance planning, elder law, business succession planning, adoptions and cabin planning.



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3800 American Blvd., Suite 1500, Bloomington, MN 55431
| Phone: 952-955-7623
333 Washington Avenue North, Minneapolis, MN 55401
| Phone: 952-955-7623
5775 Wayzata Blvd., St. Louis Park, MN 55416
| Phone: 952-955-7623

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