No one likes to think about their mortality. However, there are certain things that are inevitable in life and death is one of them. Ideally, however, estate planning starts long before death occurs. Each person may plan their asset transfers through trusts, gifting, real estate transfers, life estates and other estate planning methods to:

• Reduce Taxes;
• Reduce the costs of Probate Administration;
• Avoid the loss of assets based on medical assistance and nursing home care.

An estate consists of each individuals property, which may include possessions, bank accounts, real estate, furniture, automobiles, stocks, bonds, life insurance policies, retirement funds, pensions, and death benefits. If planned well, an estate can often be passed on before death or shortly after death with minimal loss based on administrative fees and taxes.

Wills

Minnesota Requirements for a Valid Will

Under Minnesota law, a person must be at least 18 years old in order to make a legal will. In addition, the person must be of sound mind. generally, that means that the person must have no cognitive disabilities that significantly impair him or her from understanding the full nature of the document that they sign.

Second, a Minnesota will must be in writing. It must also be witnessed and signed by at least two other people. This is what is called a self proving Will. If the Minnesota Will is handwritten, it is often called a holographic will. A holographic Will can be determined as valid in Minnesota if it is witnessed and signed by two people.

Each person making a Will must sign it. . However, if that person is determined to be unable to sign through illiteracy or some incapacitation, it can be demonstrated that they knew what they were doing when they directed an agent, another person, ideally a person who has no interest in the Will, to sign for them in the presence of witnesses.

A will is valid until it is revoked or superseded by a new will. A Will can always be changed later by what is called a Codicil.

As previously stated, a more extensive estate may require documents other than a will, such as a trust agreement, to ensure that all of a person's wishes are carried out.

Executors or Personal Representatives

A will appoints an individual to execute the Will. That person is often called an executor or a personal representative. Ideally, the executor or personal representative will be a friend or family member. That person should always be made fully aware of his or her duties before the testator dies. It is also advisable to let them know where the Will can be located. Often a copy of the Will is provided to them in a sealed envelope.

Once the executor passes away, they are referred to in legal documents as a decedent. An executor or personal representative is then responsible for collecting and managing the decedent's assets, collecting any money owed at the time of death, selling any assets, if necessary, to pay estate taxes or expenses, and filing all required tax returns.

If a person does not name a personal representative in his or her will, state law establishes the order in which a probate court appoints relatives to act as personal representative.

Appointing a Guardian for Children

One of the benefits of a Will is the ability to appoint a guardian for any minor children if there is no surviving parent. The testator may name a guardian an alternate guardians if the first elects not to exercise that duty or in the event that they predecease the testator.

A person drafting a Will should also consider executing a durable Power of Attorney in the event that the become incapacitated, unable to handle their own affairs, before they pass away. This is done by preparing a document called a durable power of attorney. This document grants another person full legal authority to act on their behalf should they become unable to handle their personal and financial affairs. Without it, the Court may have to become involved through costly legal proceedings in order to appoint a person to handle all legal affairs.

Dying Without a Will

A person who dies without a Will loses the ability to distribute their estate after their death. This can create confusing and often costly legal proceedings that may eat up the state value. It may mean paying more administrative fees, legal fees and taxes in a time consuming process.

When a decedent leaves no will or other comparable estate planning tool, it is called dying intestate. State statutes then dictate how an state is divided which is determined as part of a court proceeding called a probate proceeding. In such a proceeding, the state's, intestacy laws determine who will receive what portion of the assets.

Trusts

A trust is another estate planning tool. There are different types of trusts. There are testamentary trusts, those trusts created after a person dies as part of a Will, and living trusts, a trust instrument created to transfer assets while the individual is still alive.

In a typical trust arrangement, a person or persons hold legal title to property for another person. They are called trustees. The assets are held for the benefit of beneficiaries, those receiving the benefit of the trust.

In a living trust, you may retain control over the property held in the trust. A living trust may allow a person to transfer assets and reduce taxes as well as set up long term property management.

Generally, to create a living trust a person should have an estate with a value of $100,000 or more. Estate of $100,00 or more are subject to probate proceedings in Minnesota which can cost anywhere from 2% - 4% of the estate's value in court costs and legal fees.

An advanced living trust for larger estates may be structured to accommodate complex family situations which may include remarried spouses with children from serial relationships. Living trusts also avoid probate and are completely private.

In Minnesota, once established, almost anything maybe placed in a living trust. In "finding" the trust, you essentially change the name or title on existing assets to the name of the trust.