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Special Needs Planning

Monday, September 16, 2013

A Simple Will Is Not Enough

A Minnesota Estate Planning Attorney Explains Why You Need to do More Than Draft a Will

A basic last will and testament cannot accomplish every goal of estate planning; in fact, it often cannot even accomplish the most common goals.  This fact often surprises people who are going through the estate planning process for the first time.  In addition to a last will and testament, there are other important planning tools which are necessary to ensure your estate planning wishes are honored.

Beneficiary Designations
Do you have a pension plan, 401(k), life insurance, a bank account with a pay-on-death directive, or investments in transfer-on-death (TOD) form?

When you established each of these accounts, you designated at least one beneficiary of the account in the event of your death.  You cannot use your will to change or override the beneficiary designations of such accounts.  Instead, you must change them directly with the bank or company that holds the account.

Special Needs Trusts
Do you have a child or other beneficiary with special needs?

Leaving money directly to a beneficiary who has long-term special medical needs may threaten his or her ability to qualify for government benefits and may also create an unnecessary tax burden.  A simple vehicle called a special needs trust is a more effective way to care for an adult child with special needs after your death.

Conditional Giving with Living or Testamentary Trusts
Do you want to place conditions on some of your bequests?

If you want your children or other beneficiaries to receive an inheritance only if they meet or continually meet certain prerequisites, you must utilize a trust, either one established during your lifetime (living trust) or one created through instructions provided in a will (testamentary trust).

Estate Tax Planning
Do you expect your estate to owe estate taxes?

A basic will cannot help you lower the estate tax burden on your assets after death.  If you think your estate will be liable to pay taxes, you can take steps during your lifetime to minimize that burden on your beneficiaries.  Certain trusts operate to minimize estate taxes, and you may choose to make some gifts during your lifetime for tax-related reasons.  

Joint Tenancy with Right of Survivorship
Do you own a house with someone “in joint tenancy”?

“Joint tenancy” is the most common form of house ownership with a spouse.  This form of ownership is also known as “joint tenancy with right of survivorship,” “tenancy in the entirety,” or “community property with right of survivorship.”  When you die, your ownership share in the house passes directly to your spouse (or the other co-owner).  A provision in your will bequeathing your ownership share to a third party will not have any effect.


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.


Monday, November 26, 2012

Estate Planning: Leaving Assets to a ‘Troubled’ Heir

A Minnesota Estate Planning Attorney Discusses Complex Estate Planning Techniques

If you have a child who is addicted to drugs or alcohol, or who is financially irresponsible, you already know the heartbreak associated with trying to help that child make healthy decisions.  Perhaps your other adult children are living independent lives, but this child still turns to you to bail him out – either figuratively or literally – of trouble.

If these are your circumstances, you are probably already worrying about how to continue to help your child once you are gone.  You predict that your child will misuse any lump sum of money left to him or her via your will.  You don’t want to completely cut this child out of your estate plan, but at the same time, you don’t want to enable destructive behavior or throw good money after bad.

Trusts are an estate planning tool you can use to provide an inheritance to a worrisome heir while maintaining control over how, when, where, and why the heir accesses the funds.  This type of trust is sometimes called a spendthrift trust.  

As with all trusts, you designate a trustee who controls the funds that will be left to the heir.  This trustee can be an independent third party (there are companies that specialize in this type of work) or a member of the family.  It is often wise to opt for a third party as a trustee, to prevent accusations among family members about favoritism.

The trust can specify the exact circumstances under which money will be disbursed to the heir.  Or, more simply, the trust can specify that the trustee has complete and sole discretion to disburse funds when the heir applies for money.  Most parents in these circumstances discover that they wish to impose their own incentives and restrictions, rather than rely on the judgment of an unknown third party.

The types of conditions or incentives that can be used with a trust include:

  • Drug or alcohol testing before funds are released
  • Payments directly to landlords, colleges, etc., rather than payment to the heir
  • Disbursement of a specified lump sum if the heir graduates from university or keeps the same job for a certain time period
  • Payment only to a drug or alcohol rehab center if the child is in an active period of addiction
  • Disbursement of a lump sum if the child remains drug free
  • Payments that match the child’s earned income

If you are considering writing this type of complex trust, it is advisable to seek assistance from a qualified and experienced estate planning attorney who can help you devise a plan that best accomplishes your wishes with respect to your child.
 


Monday, June 06, 2011

What's in a Name, Part 2: Introducing Unique Estate Law

You may have noticed a slight change in my firm name. Unique Family Law is now known as Unique Estate Law.

I have always focused on unique families and continue that passion. My new firm name better explains what I do for your unique family. I focus on estate planning, probate and adoption – building and protecting families.

I am proud to specialize in this important and ever-changing area and my new name reflects that focus.

I want to be sure that you, my clients, know where my expertise lies.

Welcome to Unique Estate Law.


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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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| 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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