Estate Planning FAQ
Bowden Cyr, PLLC, assists clients in estate planning, including the preparation of wills, trusts and powers of attorney, as well as probate administration. Below we address some general questions and concerns clients often have when they come to our office in Woodbury.
- Does everyone need a will?
- Where should I keep my will?
- What is a self-proved will?
- How do I change or update a will?
- How does a will compare to a revocable living trust?
- What is a trustee?
- What is a personal representative?
- What is a guardian?
Does Everyone Need A Will?
Minnesota law does not require that you have a will. However, a will is a useful tool that provides you with the ability to control how your estate is divided. If you die without a will, state inheritance laws control how your estate is divided, and your property goes to your closest relatives based upon a statutory table of heirship.
You may not need a will if you have made other provisions so that your assets will pass without one for example by establishing trusts, life insurance policies with named beneficiaries, or joint property interests such as real estate or bank accounts. A will is necessary, however, if you want to leave property to a charity, to give certain items to certain people, or to leave someone out who would otherwise inherit from you based upon heirship. Also, you may wish to appoint a specific person to handle your estate. Thus, it is often best to write a will so your intentions can be met.
Where Should I Keep My Will?
Your will should be kept in a safe place along with all of your other estate planning documents. Make sure your personal representative, a close friend, or a relative knows where to find it and can access it, particularly if you are considering storing it in a safe deposit box. In Minnesota, the probate court or court administrator’s office accepts wills for safekeeping at no charge or for a nominal fee. You have the right to get your will back at any time.
What Is A Self-Proved Will?
A will is self-proved when you and witnesses acknowledge in affidavits that you signed and executed the will voluntarily, within the presence of at least two witnesses, that you are over 18 years old, not under undue influence and of sound mind. A will may be made self-proved at the time it is executed or at any time thereafter. You may want to consider this procedure as it helps establish that your will was properly executed, should it be contested in court.
How Do I Change Or Update A Will?
Wills can be changed either by writing and executing a new one or by adding a “codicil,” which is an amendment to a will. The codicil must be written, signed and witnessed the same way as the will, and should be kept with the original will. You may want to update or change your will if:
- You enter into marriage, or file for divorce
- A child or grandchild is born
- There is a death in the family
- You move to a new state
- The value and kind of property you own changes substantially
- Your wishes on who should receive your property change
- Your personal representative moves away or dies
- Tax laws change
Do not try to change your will by simply crossing out language or writing in new provisions. Crossing out language raises the question of whether you intended to revoke your whole will or just a part of it, and writing new provisions will be ineffective unless the provisions are signed by you and two witnesses. A will is effective until you formally change, revoke or cancel it, so it is a good idea to periodically review your will. If you are newly divorced, your estate plan will change substantially, and it is important to speak with your lawyer.
How Does A Will Compare To A Revocable Living Trust?
By placing your assets in a revocable living trust instead of a will, you can often avoid the time delays that are typical of probating a will. Trust assets, in most situations, can be distributed to beneficiaries almost immediately after your death. If you own land in another state, a revocable living trust might help avoid a probate proceeding in the other state for that property. For example, if you live in Minnesota and own a cabin in Wisconsin and place it in a revocable living trust, you may be able to avoid a Wisconsin probate proceeding.
A revocable living trust can also protect your privacy regarding the distribution of your assets. With a will, the probate laws require that an inventory of the estate’s assets be filed with the court, which means the will and the inventory become public information. With a revocable living trust, generally only the beneficiaries of the trust are informed of the nature and the value of the assets.
A trust arrangement is also useful if you are having difficulty managing your financial affairs. A trustee with financial expertise could invest your assets, arrange for payment of bills and debts, and file your tax returns. If you wish, you can establish yourself as a co-trustee.
There are, however, some potential drawbacks to a revocable living trust. Because a revocable living trust is a more complex legal document, it is often more costly to establish. Ownership of your assets must be transferred to the trust in order for it to be effective, and deeds and other documents required to transfer title must be prepared a process that can require a substantial amount of time. In addition, the use of a revocable living trust requires more ongoing monitoring to ensure that your assets remain in the trust and that newly purchased assets are titled in the trust. Trusts are also subject to other tax rules that do not apply to probate estates.
What Is A Trustee?
A trustee manages a trust’s assets in the best interests of the beneficiary or beneficiaries. The trustee is considered a fiduciary, and therefore must adhere to a high standard of care with respect to the trust. Included in this standard is the duty to protect trust property, to manage trust investments prudently, to refrain from engaging in self-dealing or receiving improper benefits from the trust, and to not mingle trust assets with the trustee’s own assets.
Trusts differ in how a trustee can distribute trust income. A simple or mandatory trust requires the trustee to distribute income to the beneficiary; a complex or discretionary trust may afford the trustee discretion over the principal and income to be distributed. The requirements of the trustee should be specified in the trust.
If you want to name someone as a trustee, talk with that individual or entity about the trust. Be sure the person not only agrees to serve as trustee, but can comply with the terms of the trust. Because the fiduciary standard imposes such a high standard of duty and corresponding potential liability, the trustee cannot be forced into becoming a trustee just because he or she is named in a trust document or will. If your designated trustee is unable or unwilling to perform, the court will appoint a trustee for you, unless a successor trustee, such as a corporate trustee, is designated.
What Is A Personal Representative?
A personal representative (also known as an executor or administrator) is the person who oversees the payment of your debts and the distribution of your assets according to your will. Responsibilities usually undertaken by a personal representative include:
- Filing your will, an inventory of your assets and other documents with the court
- Paying valid creditors
- Paying taxes
- Notifying and other agencies and companies of your death
- Canceling credit cards, magazine subscriptions and similar consumer items
- Distributing assets according to your will
Because your personal representative will handle your assets, you should always pick someone you trust. Most people choose their spouse, an adult child, a relative, a friend or a trust company to fulfill this duty, but you can name anyone as personal representative in your will. You may also appoint more than one personal representative. If no personal representative is named in a will, a judge will appoint one to oversee the distribution of your assets.
What Is A Guardian?
If you have minor children at the time of your death, in most cases, a surviving parent assumes the role of sole guardian. However, if neither parent survives, or if neither is willing and able to act as guardian, it is very important to have named a guardian in your will. The guardian you choose should be over 18 years of age and willing to assume the responsibility.
Talk to the potential guardian about what you are asking before naming that person in your will. You can name a couple as co-guardians, but that may not be advisable. It is always possible that the guardians may choose to separate at some later date; if so, a custody battle could ensue. If you do not name a guardian to care for your children, a judge will appoint one.
Call Our Detail-Oriented Attorneys To Learn More
If you are ready to create an estate plan, have questions about how to create a will in Minnesota or if you need to change an existing will or trust, please call 612-254-6409 to reach Bowden Cyr, PLLC, a St. Paul law firm with estate planning experience. You may also reach us online. We offer a free initial consultation to answer some of your basic questions and discuss our services.