Category: Estate Planning

Dying  with no will makes sense for some, but does it really?  Recently, I met with a person who didn’t want a will because they couldn’t identify who should receive their stuff.  This particular person was unmarried and had no children.

As much as I dislike the government telling me how to divide up my property, Minnesota has an estate distribution law when a person dies with no will.  The law that may apply in a situation like this Minnesota statute 524.2-103.  In my practice, I call this the “I cannot make up my mind” law.

Yes, it is perfectly reasonable to have doubt or change one’s mind.  Other times, people lean on charity or grant their affairs to a specific organization.  If it helps, take a look at what a good-hearted individual did in Afton.

Anyways, there is no right or wrong answer.  On the other hand, having an answer is better than having Minnesota apply the “I cannot make up my mind” law.

Crisis mode is different for every family.  Minus the few who handle illness and death with ease, a crisis can cause panic and confusion.  I believe in helping our loved ones with the following process:

• Create a loud colored binder for every member of the family
• Place each binder on an accessible shelf
• Use when needed.

Crisis Mode:  Loud Colored Binder

Some of my favorite loud colored binders are yellow, lime green, orange and red.  The idea is simple.

Look for my yellow binder…it is near my bed“

or

My social security card is in my orange binder“

In other words, I believe folks need an identifiable spot that keeps our most important documents.

Crisis Mode:  Binder for Every Family Member

In all honesty, I am being picky.  But, as people (young and old), everybody has a different plan.  Even when our plan is the same as our spouse, the plan is still unique to us as a person.

For this reason, I like the idea of maintaining a file for each person.  This might include:

• Birth Certificate
• Social Security Card
• Marriage Certificate
• Health Care Directive
• Power of Attorney
• Will

• Standby Guardian Authorization
• Beneficiary Forms
• Trust Documents
• Veterans Forms
• Divorce Decree
• Funeral Directive

Again, everybody’s binder will be different.  The whole idea of having an organized spot for each family member is this: when a crisis hits, nobody wants to drag around documents that do not pertain to our loved one.

Crisis Mode:  Use When Needed

Unfortunately, I am speaking from personal experience.  When something goes wrong or a person is unexpectedly in the hospital, it is difficult to think clearly.  Even worse, a lot of family members fail at finding a specific document without tearing apart a home.

In my experience, this can be avoided by talking and planning.  Thus, I like the idea of having a binder that is accessible when needed and organized accordingly.  

In one of my recent community education classes, I was asked to rank my favorite estate documents.  Thus, here we go…

Really though, I think the issue was more about money than actual estate documents.

In other words, if I had a limited budget and I needed to use my resources wisely, which documents would I desperately need?  Minus my first reaction – all of them, here are my thoughts:

Estate Documents Ranked #5 – Revocable Trust

Because a trust document is a lengthy and tedious process, I am ranking trust documents number five verses number one.  But, their effectiveness is off the charts.

A long long time ago, people started using wills to make sure their stuff was passed along easily and effectively.  Those days are gone.  Today, one of the most effective tools is a revocable trust.  Your grandparent’s estate planning methods are out of date.  If you are a grandparent, making an update can make holiday gatherings fun again.

My point is this:  because a trust helps families reduce the risk of probate and it grants a trustee an opportunity to manage our affairs while we are still alive, I believe a trust is absolutely one of the best documents in any plan.

#4 – Transfer on Death Deed

My fourth estate documents ranked are transfer on death deeds or TODD.  In practice, this document is awesome because it instantly transfers property titles to another person or beneficiary.  Sometimes, eve more than one beneficiary.

On the other hand, drafting a legal description and using the right conveyance form makes this process difficult for families needing help.

Nonetheless, because this type of document trumps a will and our number one asset is often a home, I ranked transfer on death deeds higher than a traditional will.

#3 – Health Care Directive

When I am sick or unable to talk for myself, I like the idea of making sure my loved can make health decisions on my behalf.  Luckily, a health care directive or living will can do just that.

I am in favor of making sure my affairs are straight when I am dead, so the burden imposed on my family is less.  But, I like the idea of focusing on my own well being while I am alive.  This is especially true when I introduced to an unexpected emergency.

Thus, I like the idea of ranking living wills as my third favorite estate planning document.

#2 – Power of Attorney

A lot of people are surprised when their spouse cannot make certain transactions on behalf of their partner, without being granted a power of attorney.  Luckily, this risk can be accounted for by using a free form linked below.

Yes, one of the most powerful documents we can put our signature on is a Power of Attorney form.  Some people are scared of this.  Others, use it to their advantage.  Obviously, every person is different and they should seek advisement exclusive to their situation.  That said, it is worth the effort of reviewing what this type of document might look like.

Since Minnesota introduced a free power of attorney form, I encourage many folks to select their attorney-in-fact wisely, while ensuring certain household events are easily cared for:  house payment, buying groceries, assessing my checking account, etc.

Even more significant, a power of attorney can be used if or when I am incapacitated, which puts me at ease.

#1 – Beneficiary Forms

My number one estate documents ranked are beneficiary forms attached to financial accounts (IRA, 401K, 403b, etc.).  Usually, these types of documents are readily available, are easy to fill out and offer instant relief.

In many circumstances, a beneficiary form will trump directions outlined in a will or trust.  Because they are so effective, anybody failing to update their beneficiary form is creating a huge mess or forcing their family to seek relief in probate court.

In addition, I like the idea of gathering copies of my beneficiary forms and having them available.  In other words, I keep copies of beneficiary forms with my other important documents.  In theory, this will help my loved ones with an easier transition upon my demise.

Estate Documents Ranked – Honorable Mentions

Of course, there are many other resources that families and veterans should consider when creating an estate plan.  Thus, here are a few resources and documents that folks are using:

• Minnesota’s Attorney General’s feedback on Estate Planning
• Pour Over Will
• Funeral Directive
• Certificate of Trust
• Standby Guardian for a Child

When a person says they want to leave everything “to my estate” [their estate], they are often surprised to find out that this is a broken plan.

I know folks do not read my posts to get the third degree.  But, this is serious stuff.

Instead, I encourage my Clients to pick specific beneficiaries, use a will and identify a quarterback to administer an estate.  

If you are wondering about the quarterback process for an estate plan, please take one of my upcoming classes.
The alternative is this: telling the whole world that we don’t care and we want our remaining savings spent on creditors and probate costs.  

Even if you you only have $100, wow…how nice would it be to pass that money onto a grandchild versus Comcast.

To My Estate is Not a Beneficiary

The reason “to my estate” is not a beneficiary is because it doesn’t identify specific heirs or decedents.

The idea behind picking a beneficiary is to offer precision so our Court System isn’t required to guess or use laws that contradict our intentions.  

The idea of protecting against dead beneficiaries is the process of dying testate (the opposite of dying intestate).

My Will Versus My Estate

Beneficiary forms and wills do a great job of helping loved ones administer our stuff.  Whether folks use the per stirpes method or a different process, doing so can really take the pressure off of a probate court and loved ones.

What Does To My Estate Feel Like?

Again, I don’t mean to be critical, but I think this post calls for it.  Stating “to my estate” is lazy.  In my experience, people telling their bankers and financial advisors they want to leave their account in a hodgepodge mess is literally being one step away from doing something wonderful for our loved ones.

Land registration is always the first issue when I draft a Transfer on Death Deed (TODD) in Minnesota.

Finding this information is very simple.  But, it is still a very significant step.

Land Registration Basics

Lets keep this simple.  Every piece of land (home, business, farm, rural, residence, etc.) is different and unique.  In theory, every piece of land or parcel is registered within the County it sits.

Luckily, all of us can visit our local County headquarters and acquire information on any piece of property inside the county.  In general, I look for written documentation showing the following:

• Is a property titled Abstract or Torrens or something else,
• Does a property have any attached or recorded liens, and
• Acquiring the correct legal description.

In addition to other requirements, the above pieces of information are critical for every TODD.

Why Land Registration Matters

The above information matters because the transfer on death deed conveyance forms in Minnesota require the above information.

Because a death deed is a document that speaks on our behalf when we die, getting this information correct is of critical importance.

Abstract or Torrens in Minnesota

From an estate planning perspective, the advantages of property being titled under the Abstract system versus the Torrens system is moot.  Instead, unequivocally knowing which one applies to a person’s property is the primary objective.

As I mentioned above, we can find out very easily by:

• Contacting the Recorder’s Office within a specific County, and
• Acquiring paper records verifying the land registration system.

For those tempted to look on the internet or ask their neighbors, don’t do it.  Information on County websites are consistently wrong.  And, it is not uncommon for side by side properties being titled differently too (sorry Richfield).

Land Registration is Always the First Issue

Personally, I believe land registration is always the first issue because it requires work to verify.

In my experience, putting in this work helps find answers to the various other questions necessary to complete a MN transfer on death deed.

Failing to put in the work puts the whole process in jeopardy.

Parental authority forms come in waves.  As you and your child celebrate another school year, very likely summer activities and groups will ask you for authorization forms.

Authorization forms from a school or camp protect that specific entity.

On the other hand, a Delegation of Parental Authority Form (DOPA) can protect you and your child.

Estate Planning

Contact Now

What is a Delegation of Parental Authority Form (DOPA)?

Basically, this form helps another adult identified by a parent to care for a child, including:

• Taking a child to the doctor,
• Dropping them off at school,
• Picking-up a child from school.

Who Should Have a Delegation of Parental Authority Form?

Personally, I think everybody who has a child should have a DOPA.  But, here are examples of other situations when a parental authority form can be very helpful:

• Single parents,
• Parents who travel for their job,
• Parents fearful of going to jail,
• Parents who fear immigration issues, and
• Any parent concerned with day-to-day activities.

Minnesota is being ProActive

Likely, none of your friends will know this.  But, Minnesota has been very proactive with delegation forms.  In fact, we as residents can have the DMV add information to our drivers license.

In other words, if we are involved in an emergency accident, our drivers license can help others identify a temporary guardian for our children.

What I Include on a Minnesota DOPA

When I draft a DOPA on behalf of a parent or family, I like to make sure the following information is easily identified:

• School Name and Location
• Doctor Contact Information
• Food Allergies
• Medial Insurance Issues
• List of Weekly Activities

Of course, these types of contacts change on a regular basis.  But, having a starting point can be critical for the stand-by guardian.

Free Delegation of Parental Authority Forms

Even better, there are free resources available to help parents and families with their Delegation of Parental Authority Form.

• Law Help
• MN Statute

Not surprising, I believe these types of forms should be specifically drafted to help a specific family and their concerns.  But, it is nice to know that free options exist too.

Bank records for a “typical” estate plan can be as as simple as gathering statements.  But, the bank we use on a daily basis is hardly the problem.

Instead, it’s the checking account opened 20 years ago that people never use, that causes the biggest problems.

Luckily, I think most people can help their families in 3 easy steps.

Bank Records in 3 Easy Steps

I know the following steps are easy.  Certainly, I am not trying to insult your intelligence.  Unfortunately, very few people take time to straighten their affairs, which was the intent behind this article.

Anyways, here are the 3 easy steps I wish more people would engage:

3. Gather bank statements and place them in a folder housing important documents.  

2. Closing Unused Accounts

1. Identifying a beneficiary for Pay on Death (“POD”)

Gathering Bank Statements

Because so many people are getting bank statements by e-mail, acquiring hard copies of records is very difficult.  In the probate process, there are 3 elements beneficiaries and personal representatives need from their deceased loved ones:

• Name of bank
• Account number, and
• Routing number.

As you might suspect, obtaining a password and username to an e-mail account can become more cumbersome than obtaining bank records.  This is true because banks generally have phone numbers and people answering their phones.  On the other hand, e-mail services do not.

Thus, gather bank statements.

Closing Unused Accounts

Remember the bank account you opened to acquire a car loan?  Or, that bank account you opened when you lived in a different city?  Well, close them.  Right now…call the bank and take the initiative to close the account.

Here is the problem.  Family members can spend thousands of dollars on the probate process for an account holding peanuts.

Thus, make life easy on loved ones and close unused bank accounts.

Pay on Death (“POD”)

For smaller estates, I love the efficiency of identifying a beneficiaries and making the account pay on death.  Unfortunately, this still isn’t enough because PODs can go wrong.  Horribly wrong.

Ideally, I encourage families to fund their revocable trust with any and all bank accounts.  If this isn’t feasible, then using bank records to draft a proper POD beneficiary form is highly recommended.

I wish you and your family the very best.

Are you going to die without a will? Does it matter?  Will it matter once we check into Heaven?

Likely, the person at the pearly gate will not care whether we have a will.  But, our children will.

Failing to plan means your affairs will be left to the government.

I believe every person should reduce guessing and stress by deciding to die with a will.

What happens in Minnesota if we die without a will?

If a person dies without a will, their family is stuck with Minnesota’s probate plan.  Minnesota’s plan is called intestacy.  This means which Minnesota law will determine who receives all or a portion of the estate.  More significantly, Minnesota’s guardian laws will determine who becomes the next parent to our children.

Also, a Creditor can take control of the assets before a loved one…even before our own spouse.

Like you, I am not ready to die.  But, just in case I get hit by a bus – there is a plan in place to help loved ones (spouse, children, grandchildren and pets).  Thus, the laws that apply will play a significant role.

What laws apply when we die without a will?

In Minnesota, a family trying to manage an estate for a person who died without a will be forced to utilize Minnesota’s uniform probate code.  The probate laws and rules determine whether our affairs get decided through an informal or formal process.

First step after a person dies

In every case, the firs step is always the same:  what about the spouse and children.  When we put a plan in place, the guessing and time commitment can get eliminated or reduced to a minimal process.

The next step after a person dies

The next step entails picking an ideal personal representative and preparing for either an informal probate or formal probate process.

Before you die without a will

I get it – this is a difficult thing to think about.  Luckily, we have a choice before things get worse or impossible to manage.

Estate planning is a wonderful thing.  But, who can focus on an estate when the NBA lottery is unfolding?

If you are like me, seeing the cards for each franchise and pick is exciting for about a minute.  After that, reality sets in.

Luckily, estate planning is a lot different than the NBA lottery.  Oh sure, a lottery can be exhilarating, but then, normal day stuff takes over.

For this reason, I want to quickly identify 5 ways estate planning and the 2017 NBA lottery are different:

5. Nobody other than my family, needs to know the plan (or pick).

4. We can make choices without the permission of government (commissioner) rules.

3. We are not dependent on ping-pong balls (lottery)  to decide our fate.

2. We can make different choices than our family members (or other NBA teams).

1. None of us can guarantee we will be here on June 22, 2017 ( date for the NBA draft).