Category: Estate Planning

The easy way to avoid Minnesota probate is to never die.  No, seriously – if you never die, then probate will not be an option.

On the other hand, if you think you might die someday, grab an adult beverage before you read the next line: nobody can avoid probate 100%.  Instead, our goal is to reduce the risk of probate.

Now, I know what you are thinking….your friends told you they have a revocable trust and they are going to avoid the headache they experienced when their parents died.

I agree, a trust is an excellent way to reduce the risk of making your family stress over the probate process.

On the other hand, there are generally three reasons why your trust will not necessarily help your family avoid Minnesota probate:

• You forgot to fund an asset (maybe you decided to make a purchase in your 70’s or 80’s),
• Pain-in-the butt family members, or
• Creditors (like hospitals, nursing homes or credit card companies).

Avoid Minnesota Probate the Cheap Way

In a class I teach, I stress one sure strategy on the cheap end (meaning it should not cost you any money) to reduce the risk of probate in MN: make sure your financial accounts have beneficiaries.

For example, if you have a bank account, please please please make sure you identify a beneficiary to acquire your account when you die.  In my experience, most banks call this type of beneficiary a POD or Pay on Death.

Of course, I prefer transferring a bank account into a trust, but we are talking about the cheap way, not the right way.

In case you are stuck on who to choose, let me give you some fantastic examples:

• Your spouse,
• Children, or
• The cable company.

I admit, naming the cable company is crazy talk.  That said, it is crazy how many people fail at naming a beneficiary.  Thus, get it done and come back to my article.

Avoid Minnesota Probate Another Way

Just because you saved money in a retirement account doesn’t mean you need a heavy-duty financial planner to name a beneficiary for your 401(k) or 403(b).

Of course, if your beneficiary dies at the same time you die (in a car accident) or you want to assist your spouse and children in making the transfer of your retirement account a little easier, likely a revocable trust is strong option.

As you muster up time to think this through, please please please contact the financial institution holding your account and name a beneficiary for your retirement accounts too.

Avoid Minnesota Probate the Drastic Way

A popular method to avoid Minnesota probate is to create a trust and inside the trust have a clause that looks like this:

If any person or entity challenges my revocable trust and they lose, their interest in my estate will be expressly disinherited

Of course, there are better ways to do reduce the risk of having your estate challenged.  None the less, this is one of many different options.

Avoid Minnesota Probate the Right Way

It wasn’t by accident that I chose a picture of people sharing a beverage with one another while sharing a laugh.  In my experience, the strongest way to avoid Minnesota probate is to create a plan and share it verbally with your loved ones.

For example, share with your elderly parents who will be taking care of your children if you die and what to do first in case of an emergency.

Or, maybe this means sharing with your spouse tha your power of attorney document is kept on the book shelf or your health care directive identifies a list of medications you take on a regular basis.

The bottom line:  talk about your plan as if you were going to die someday versus pretending everybody else other than you is doomed for a bad day.

Pets in your will you say? As a pet owner myself, pets are significant to a family and those caring for them. As a result, being creative with their care and long-term planning is a must.

Unfortunately, our estate laws treat pets as property, versus the loveable family members they really might be. This means having a plan for your pets is a legitimate planning goal.

Naming Pets In Your Estate

The preferred method of assuring your pet is cared for is the process of creating a “pet trust.”

From a practical perspective, this means creating a trust for your larger assets and including a specific claws (or clauses) exclusive to your pets. Ideally, the section takes into account the Trust Act.

On the other hand, a will can certainly be another method of caring for a cat or dog. But, animals needing care for medical issues or maintenance will likely benefit more from an owner deciding in favor of a pet trust versus other planning tools.

Pet Trust Claws

Obviously, nobody knows your furry friend better than you. But, there are many animal owners who forget the significance of adding a photograph to their trust, addressing feeding schedules, being clear on which veterinarian is desired, etc. In other words, a pet trust should be drafted in a way that is exclusive to your animals.

Also, an article of the trust can allocate money to the needs of your cat or dog. For example, suppose you have your animals groomed once per month and it costs $70 dollars per grooming.  If your dog or cat was expected to live for 8 years, then ideally your pet trust would be funded accordingly.

Now, this doesn’t necessarily mean having $6,720 dollars readily available ($70 x 12 x 8). But this does might mean gifting a motor vehicle to the pet guardian selected that takes into account the maintenance of your four legged friend. Again, creativity is the name of the game when considering placing pets in your will.

Guardians Named In Your Trust

Money aside, selecting the best animal guardian in your will or trust means addressing this issue before it comes up. In other words, ask your friends and family members. Ask them whether they would be willing to care for your pet is highly encouraged.

As the saying goes, an ounce of prevention is worth a pound of cure. Unless you ask, you may never know whether the person you selected is allergic to hair or physically unable to care for more than themselves. Thus, asking questions or interviewing potential guardians is a strong proactive move.

Are There Other Options

Yes, there are other options versus naming pets in your will. Whether you are considering a will, a trust, or want to leave a charitable contribution to an animal friendly organization, I think we all agree that our furry friends are family.

Picking a standby guardian is hard.  I believe every parent stresses over the care of their child.

Thinking about a situation where you are unconscious or dead quadruples this stress.

Luckily, parents can:

• Designate a standby parent,
• Identify an alternate or backup to their first pick, and
• Select which triggering events will allow for a standby to step in.

Rules and Forms for a Standby Guardian

Yes, Minnesota has specific rules on the designation process.  The rules for a standby guardian are under Chapter 257B.

Also, Minnesota has a somewhat helpful form as a guideline, which you can find HERE.

Tips for selecting a standby guardian

In my opinion, here is a short list of tips and risks for selecting a standby guardian:

1. Select a guardian that doesn’t contradict your Will or Trust,
2. Do not force your standby guardian to blend your child’s money (your money),
3. Do not incorrectly complete a standardized form,
4. Communicate your desires with the primary and alternate backups,
5. Do not grant a different standby guardian for each child,
6. Acquire signatures from your standby, and
7. Have a guardian for a short-term conflict and a long-term conflict.

Can a Standby Guardian take my child to daycare?

Yes, a standby guardian can take your child to daycare in the event you are hurt or injured.  Likely though, you are confusing the goal of this form with a form for delegating parental rights.

In my experience, parents confuse the process of selecting a guardian with a different form often called a power of attorney for childcare (sometimes called a Delegation of Parental Authority).  Yes, a power of attorney for childcare is a different form and usually used in situations where grandparents help with:

• Medical care,
• Dental visits,
• Obtaining prescriptions,
• Daily activities.

Triggering events for a standby guardian

Earlier, I identified a term called triggering events.  Basically, a triggering event is a situation you select that gives the guardian a reason to step-in.  Absolutely, everybody has the potential of outlining a different list of triggering events specific to them and their family.

Here are a few examples:

• Your death,
• Unconscious,
• Being ill or sick,
• Both parents being unavailable,
• A parent is serving in the military, and
• Jail.

Other requirements to think about

In addition to other conditions under Chapter 257B, every form should include your:

• Intent,
• A list of conditions,
• The use of two witnesses,
• Signatures from both parents, and
• An acceptance from the guardian of your choice.

Need more help?

Please contact me directly if you find yourself needing help.

A painful estate plan is one that makes others cringe and shriek.  Very likely, you know what I mean.

If you do not, here are a few examples to get us going:

• The plan you made dates back to the 70’s,
• You re-married and failed to update your old plan,
• At the age of 80, you just now decided it was a good time to create a plan,
• Both executors of your Will are dead and you know it,
• The last time you reviewed your plan was the day you signed it, or
• You have twice as many grandchildren and half as many daughter/son-in-laws.

Reduce your Painful Estate Plan

Yes, you can reduce your painful estate plan by acknowledging it has flaws and making a change.

To be clear, I believe in reducing stress and anxiety for your loved ones and today is the day I want to make this point clear by associating pain with your outdated plan.

Yes, a painful estate plan is a bad habit you can change.

Timing of a painful estate plan is never good

Ideally, all of us would get a two-year window alarm before our time is up.  Unfortunately, very few of us get this luxury and those that do are generally unable to make decisions on their own behalf.

In my opinion, one of the best times of the year to begin the process of creating an estate plan is the same week a person begins their taxes.  If this doesn’t work, then anytime between May and December works too.

The most painful estate plan is…

Yes, the most painful estate plan is the plan that was never formalized or does not exist.  Quite frankly, I think this goes without saying.   Unfortunately, it is not very difficult to find examples where people failed.

Thus, please bring this topic up with those that you love and remind them to update their estate plan.

A funeral honor guard can be very tricky for families who are not familiar with this process.

Because I am confident my own spouse would be lost if required to make funeral arrangements that encompassed my VA benefits too, I developed a short outline to help other military families in Edina and the surrounding area.

Veteran Estate Planning

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Forms for a Funeral Honor Guard?

If your loved one never mentioned this, you heard it here first.  The VA requires a form for everything.  Here is what you will need to make sure a funeral guard and other funeral arrangements are affirmed for you and your family:

• Application for burial benefits: VA Form 21P-530
• Request specific funeral arrangements: VA Form 10-2065 
• Application for a US Flag to be used at the funeral service: VA Form 27-2008
• Headstone for a a Military Cemetery: VA Form 40-1330
• Headstone for a Private Cemetery: VA Form 40-1330M

What does a Funeral Honor Guard do?

Members of the military assigned to an Honor Guard refer to a funeral assignment as a “detail”. The easiest way to help yourself understand what a Funeral Honor Guard will do is by watching a short film here.

Generally, upon requesting an honor guard for a Veteran, the honor guard will (1) carry the casket or urn from its location to the burial spot, (2) present a folded US Flag, (3) provide a gun salute, (4) present bullet shells, and (5) play a closing musical honor.

How many people are part of the Honor Guard?

At a minimum, the honor guard for a funeral will have at least 2 people.  Larger honor guards can be much larger ranging from 4-8 people.  Right or wrong, military status impacts this element of the process.

It is important to note that  at least one of the persons in the honor guard will be from the same military branch as your loved one.  Some families do not see why this is significant.  Really though – it matters.

Should you bother seeking an Honor Guard?

As an attorney and Veteran, I hear a lot of families inquire whether it is even worth the hassle.  No, it isn’t a hassle.  Yes, it is well worth the time and effort.

I always encourage families to seek an honor guard for the funeral.  For one, your loved one earned it by serving our country.  Second, it is generally no cost.  Third, it is a privilege that usually exceeds everybody’s expectations.

Thus, go the extra mile and seek a Funeral Honor Guard.

Rules Granting an Honor Guard

There are two rules that apply to a funeral honor guard in Minnesota.  First, Minnesota statute 197.23 affirms the VA will pay for an honor guard.

Second, something called Public Law 106-65 is the federal rule that grants your Veteran and certain dependents an opportunity for a funeral honor guard in Minnesota.

Who manages the Funeral Honor Guard in Minnesota?

If you are seeking a funeral honor guard in Minnesota, the Department of Defense manages this process.  That said, the person or entity you should contact first is the funeral home.

However, the Department of Veterans Affairs (VA) National Cemetery Administration cemetery staff can also assist with arranging military funeral honors.

Likely, planning a funeral for your loved one is stressful enough.  Thus, make it easy on you and your family by delegating specifics to the funeral home.

Do you need help?

If you or your family need help or assistance with benefits and rights your loved one earned while serving in the Military, please contact this law office for help.

Funeral planning in Minnesota is a special process. Whether thought through in advance or addressed in a moment of need, funeral planning is different for every person and family.

Under Minnesota law, you may include directions regarding your funeral and burial in your will or in a special document you sign for that purpose. You may appoint a person who has authority to make arrangements after your death.

Estate Planning

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How should I plan my funeral?

Some things to keep in mind when planning a funeral:

• Your budget and true desires should guide your choice of arrangements. You generally have the option of choosing cremation, burial in a cemetery plot, or burial in a mausoleum; and
• You may wish to involve several members of your family, close friends and/or clergy members when you make funeral arrangements.

Minnesota law and the federal Funeral Rule give you tools to control the cost of funerals. When you request funeral information, these laws require funeral directors to provide detailed, pre-purchase price information, including a “General

Price List” of all services offered that lists an effective date. Following the funeral arrangement, a detailed itemization, called the “Statement of Funeral Goods and Services Selected,” must be prepared.

There are many laws in place that protect consumers from deceptive practices by the funeral industry. For example, a funeral provider cannot require that you purchase a casket for cremation. A funeral provider cannot condition the purchase of one funeral service upon the purchase of another funeral good or service.

Further, it is against the law for funeral providers to charge a fee for handling, placing or setting a funeral good based upon the fact that the good was not purchased from that funeral provider.

How should I pay for my funeral?

You can make your own funeral arrangements before you die. You may set aside funds to pay for your funeral. One way to do this is to invest the needed amount of money, or put it in a bank account, making sure it will be accessible to family members upon your death. A second option is to prepay for funeral goods and services.

What safeguards exist for consumers who pay in advance?

To help safeguard prepaid funds, Minnesota law requires a funeral director or cemetery operator to place all prepaid funds in a trust account in a bank or other financial institution until the need for your funeral arises, and to advise you of the financial institution’s name and the trust account number.

Minnesota law allows you to make arrangements so that you can receive a full refund of all prepaid funds at any time before services are provided.

There are also safeguards in the law to ensure that funds are available for the long-term upkeep of cemeteries and mausoleums. Certain cemetery operators must place in trust 20 percent of funds received from the sale of cemetery lots and 10 percent of funds from the sale of mausoleum space. These “permanent care and improvement” trust accounts are to ensure the future care and maintenance of cemetery grounds and buildings.

Finally, the law requires annual reporting and record keeping for both “pre-need” and the “permanent care and improvement” trust funds:

• Licensed funeral directors must file an annual report disclosing the status of the pre-need trust fund with the State Commissioner of Health;
• Cemetery operators must file an annual report disclosing the status of the permanent care and improvement trust fund with their County Auditor; and
• The Minnesota Department of Health, Mortuary Science Section offers information and takes complaints on funeral goods and services.