IAJ Law, LLC

An Armor of Light

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Month: July 2022

  • Laws Impact Estates, But Which One?

    Laws Impact Estates, But Which One?

    Laws impact estates and plans, but which one applies first? For those keeping track, we have local ordinances, Minnesota statutes, Minnesota Rules, a State Constitution, Federal Codes, Federal Regulations, U.S. Constitution, administrative opinions, letters, and court decisions, and a handful of other rules and laws.

    Also, we have made up rules created by financial institutions, third-party administrators, and employers too. The point is this: we have a lot of laws and most of them impact an estate. So, what should we do?

    As the laws around us become more and more complicated, perhaps simplifying our life is the strongest response to an abundance of regulations. Of course, simplifying is different for each family.

    For some, this means having a conversation about what to do with an inherited IRA. For others, this means restricting financial temptations.

    Another strong response includes a purposeful plan that was designed with triggers and conditions.

    For example, if I die with significant wealth, whether that means my family cashed-in on a life insurance policy or otherwise, I want a document that triggers protection from certain taxation. Or, if I suffer from a heart-attack and succumb to a permanent disability, I want my documents to trigger an opportunity for care that alleviates stress.

    Really though, the best answer to so many laws impacting an estate is a reminder about control. We can make choices today that will have a positive impact on our future. Even better, our choices teach younger generations about serving and protecting our family

  • Free Annual Report For Each Family Member

    Free Annual Report For Each Family Member

    Obtaining a free annual report is critical to the planning process. As the name suggests, this is an annual process recommended for each and every person in your household. This includes persons under the age of 18, including newborns.

    This step is important because it helps reduce fraudulent activity. From a practical perspective, print your free annual report every year.

    Next, add a printed version to your estate planning portfolio. One way to remind ourselves to complete this planning task is to do this around the same time we file our annual tax return.

  • Estate Planning Story about the Gregory Brothers

    Estate Planning Story about the Gregory Brothers

    The Gregory brothers have an interesting story about family dynamics. As told through Minnesota’s Court of Appeals, the Gregor brothers had a sibling “clash” with their sister over a 4th generation farm.

    As the story went, Grandma’s will distributed a 95-acre farm equally between her adult children.

    Unfortunately, the sons disagreed with the sale of the farm and aired their animosity publicly.

    This sibling clash was described in a recent case called A21-1231. Here, we learn about animosity, family problems, and a few key laws.

    Sibling Animosity: Lesson 1

    The first lesson was about animosity. Animosity is rarely a reason for a Court to remove a personal representative. However, an emotionally unstable executor might be enough.

    Certainly, lots of siblings disagree with one another. Even so, would you consider your own sibling as emotionally unstable?

    For those wondering, that was a rhetorical question only . Nonetheless, the above case reminds us that sibling relationships are not always easy.

    Protecting an Estate: Lesson 2

    The second lesson we get is the idea that protecting an estate by seeking a court approval is an aplaudid practice, especially within a probate proceeding.

    On the other hand, had Grandma considered a trust, perhaps the clash between the Gregory brothers and their sister could have been avoided.

    Court Petitions: Lesson 3

    Third, we are reminded that just about anybody can petition a court and ask for the removal of the executor. When this happens, Minnesota law 524.3-611(a) tells us that the court must fix a time and place for a hearing.

    Conflict of Interest: Lesson 4

    The fourth lesson we can learn from the Gregory brothers is the idea that problems sometimes arise when a member of a family wears too many hats, otherwise known as a conflict of interest. For example, naming an adult child as a personal representative, while knowing they are also might inherit property as a beneficiary might be construed as a conflict of interest.

    This case centers on a clash between siblings”

    Scott County District Court, File No. 70-PR-20-9342

    Of course, a lot of times, adult children are the best candidates to serve as our personal representative. despite the risk. Really, it depends on the dynamic of the heirs and communication.

    When there is a doubt, we turn to laws and rules. In Minnesota, the rule is actions inconsistent with carrying out the terms of the wills or delayed, mismanaged, wasted, or misappropriated estate assets causes a conflict of interest. See Munson, 57 N.W.2d at 29; Matteson, 245 N.W at 382.

    Thus, whether a conflict of interest arises during the course of administering a will or trust depends on the circumstances.

    Therefore, learn from sibling clash outlined above and consider engaging an estate attorney.