Using Joint Ownership to Avoid Probate

Posted on October 22, 2019 by jlawyer

Using Joint Ownership to Avoid Probate

Preventative maintenance isn’t just for your home and vehicles. It’s also for when you’re handling your assets.

Probate doesn’t need to happen. You can have a will and several trusts in place, but joint ownership is another method that you can also be implemented. There are multiple different kinds of joint ownership (some of which are mentioned below). Certain kinds are designed to ensure that probate doesn’t happen.

Joint ownership is a great method in case you’re looking to pass on an asset or two while maintaining your ownership. You may have already share joint ownership of a house or car because you signed with your spouse. However, there might be other assets that you have which might still be open to going through probate. So, here are a few things to consider in case you’re looking to visit a probate lawyer for help.

Pick the Right One

One kind of joint ownership may not fit all. That’s probably one of the larger factors you need to consider first. In general, there are about three kinds of joint ownership that you need to worry about. As for the other kinds of joint ownership, they might not help you avoid probate, resulting in potentially wasted effort. As a general rule, just double check with a probate lawyer before you finalize on any kind of joint ownership.

Joint tenancy in Minnesota with right of survivorship, community property with right of survivorship, and tenancy by the entirety are three examples or joint ownership that should normally work. The key word you want to look for is survivorship. Ownership methods with survivorship in the name should normally prevent that asset from going to probate. However, not all states utilize the same regulations for certain forms of joint ownership, making some kinds exclusive to married couples and/or registered domestic partners.

Don’t Forget the Debt

Just because you can avoid probate doesn’t suggest that you can forget about debts. You may have heard this a thousand times before, but one of the only kinds of debt that normally disappears upon death is student debt. Any other debt you’re probably going to have to deal with. Someone must be paid and someone must be the metaphorical piggy bank from which that money comes. On a similar note, probate is not avoided once/if both owners pass. So, if both owners pass and there’s still debt to pay, the assets might disappear.

Remember that when you share joint ownership with someone, you may find yourself paying off their debt. This is a warning. Debts are normally settled during probate for most items. Items held in joint ownership may avoid probate, but the debt collector may come knocking eventually. Joint tenancy can help transfer the title of the property, but that also means that the responsibility for paying off that property is sometimes carried over as well.

Possessions to Consider

To ensure that you hold joint ownership and/or to give you ideas of what can be held under joint ownership, here are two general lists. The two items on the first list, vehicles and real estate, shouldn’t come as much of a surprise. It makes sense to have joint ownership for items that you and your significant other utilize equally, making them necessary components regardless of who outlives the other.

The four items on the second example list all involve money. Stocks, bonds, bank accounts, and brokerage accounts can normally be owned jointly. As for checking any of the above kinds of property, whether a part of the first or second list, that can vary from item to item. For the first list, check deeds, registration slips, and certificates of ownership. For the second list, check passbooks, registration cards, stock certificates, bonds, and account statements. If you’re having trouble checking, consider contacting a probate lawyer for direct assistance.

More the Merrier

Two is company, but three or more might be the right number for joint ownership. As a warning, anyone who you make an owner might obtain the same powers as you have. Be careful to trust before you entrust. The obvious advantage is giving more individuals access to and power over various assets. Maybe you want your son/daughter and their spouse to have ownership over your home as their family serves as your live-in caretakers, allowing them to retain the property once you pass.

Moreover, having multiple owners can help prevent probate should one or more person suddenly depart from this world. Going back to the previous example, say that your son/daughter-in-law unexpectedly dies in a car accident. Your son/daughter still has you to hold the property further preventing probate from becoming problematic. They can remarry and with your blessing, add their new spouse onto the property to help maintain it. Probate can strike when your property isn’t properly passed on.

Probate Prevention

To prevent probate as much as possible, a probate lawyer is probably your best assistant. As a tip, go to the law firm of Flanders Law Firm LLC. You can call them at 612-424-0398 and set up a meeting.

You may or may not have all your assets lined up properly, but it never hurts to double check if everything is set in legal stone. They can also help you with other ways of preventing probate like creating a will and/or creating trusts. When you visit, you may even want to consider bringing your present will and/or any trusts that you own. They can help you figure out preventative ways to reduce the chances of dealing with probate.

Sources:

https://www.target.com/p/8-ways-to-avoid-probate-12-edition-by-mary-randolph-paperback/-/A-53506195

Contesting a Will in Minnesota | Common Will Contest Do’s and Dont’s

Posted on June 18, 2018 by jlawyer

Contesting a Will in Minnesota

If you have written a will or are thinking about doing so, you likely want to be sure that it’s done well. After all, the goal of a will is to ensure that your wishes are honored when you’re no longer around.

If a will is found to be invalid, it could mean that your wishes are altered or ignored entirely, throwing your carefully crafted plans into doubt. To avoid having your will invalidated, keep the following issues in mind.

Coercion

Wills can be invalidated if it is found that the person who created the will (known as the testator) was coerced or created the will under duress. This coercion can take many forms, but if the end result is that the testator felt forced into creating the will or drafting it in a certain way, it is likely to be found invalid.

Fraud

Fraud is a pretty clear reason for a will to be found invalid. If a will has been tampered with or altered in some way, then a court will likely rule that it has been invalidated. It’s for this reason that it is important to ensure that any changes made to the will are executed properly.

Lack of capacity

A common reason why wills are challenged has to do with the testator’s mental capacity. If the person creating the will is not of a sound mind, then any document he or she drafts or signs will not be found valid. Judges will scrutinize claims concerning lack of capacity as they want to ensure that those with diminished capacity are not preyed upon by greedy relatives.

Improper Execution

A final reason why a will may be found invalid is if it was improperly executed. In Minnesota, a will must be in writing, it must be signed by the testator or by someone else in the testator’s presence and at the testator’s direction, and it must be signed by at least two witnesses within a reasonable time of witnessing the testator’s signing. If the will was executed any other way, you run the risk of a legal challenge.

What if you want to prevent a challenge before it starts?

If you’re in the process of drafting a will and want to do everything possible to avoid loved ones contesting the will down the road, what should you do? First things first, do everything you can to avoid invalidating the will. Assuming you’ve checked those boxes, another thing to consider is including a no-contest clause in the will. What does this do? Though it does not guarantee that no one will challenge the will, it does work to seriously disencourage heirs from doing so. The clause works such that anyone who has challenged a will is automatically disinherited. It means that fighting to get more may instead lead to getting nothing at all.

Minnesota Will Contest Lawyers

An experienced Minnesota probate lawyer can help walk you through the probate process, answering questions along the way. For more information on estate planning in Minnesota, along with a variety of other topics, contact Joseph M. Flanders of Flanders Law Firm at (612) 424-0398.

Minnesota Insolvent Estate Law

Posted on October 23, 2017 by jlawyer

What happens when an estate runs out of money?

When most people think of an executor’s job they imagine presiding over the distribution of a number of assets, money, personal items, even real estate. Though this is certainly true in some cases, it does not fully capture an executor’s role. He or she does not only distribute money to heirs, but must also distribute money to pay debts of the estate.

The hope is that there are enough assets to cover any liabilities, leaving something left over for family and friends, but sometimes that isn’t the case.

What happens then? To learn more about what happens when there simply isn’t enough money to go around, keep reading.

First, let’s back up as it’s worth mentioning that one of the primary duties of an executor is to pay the debts incurred by the person who passed away. Though the person is no longer around to pay the bills, his or her estate becomes legally responsible for debts entered into during the decedent’s lifetime.

What are some common examples? If the person owes money for housing, either a mortgage or rent, those payments will need to be made. The same is true if the decedent owed money for child support or alimony. These obligations do not disappear after death. Credit cards, medical bills, auto loans and many other debts must also be paid.

Things to keep in mind

Though executors are obligated to pay debts of the estate, it is important to remember that the estate is only responsible for paying legitimate debts that were created prior to the decedent passing away. If the debt arose after the person’s death it is possible that it will not be held legally enforceable against the estate. Promised charitable donations may also not be found enforceable, as these are sometimes seen as moral, rather than legal obligations.

Something else to keep in mind is that some obligations don’t need to be paid off as the debts are attached to certain items of property. For instance, auto loans follow the vehicle and it’s common for the person who inherits the property to inherit any debt associated with it.

What if the estate is running low on funds?

Unfortunately, in some cases debt has a way of piling up. When that happens, the executor may come to understand that there isn’t enough money to cover all of the estate’s debts. What do you do at that point? Pay bills randomly? Pay those that are screaming the loudest? No. If your estate lacks sufficient resources then you need to seek expert advice as there are specific rules in each state that govern the order of priority for paying creditors.

When is an estate insolvent?

An estate officially becomes insolvent when the estate has more claims (or liabilities) than it has assets to pay them. If that’s the case, then the executor needs to declare the estate officially insolvent. Be sure to work with a local probate attorney to assist with this process as it can be quite complex. If there are revocable living trusts, it is possible that they could be used to pay liabilities, though this will depend on the particular facts of your case.

In Minnesota, the law says that if an estate is insolvent that the following priority will be applied to creditors. First, any liabilities which arise after the death of decedent, such as funeral expenses, attorney fees and estate administration costs must be paid. Second, any federal taxes that are owed must be paid. Third, medical or nursing home expenses for the person’s most recent illness are owed. Fourth, medical or nursing home expenses related to the decedent’s last year of life are owed. Fifth, debts and taxes with preference under Minnesota law as well as state taxes must be paid. After that, all other claims are paid depending on how much money remains.

Minnesota Probate Lawyers

Source: “Insolvent Estates – Who Gets Paid What When an Estate’s Debts Are More Than Its Assets?” by Deirdre R. Wheatley-Liss, published LexisNexis.com.

Minnesota Probate Law | Disinheritance

Posted on August 9, 2017 by jlawyer

If you’re preparing to draw up a will or a larger estate plan, it’s natural to think about who you do and do not want to leave your possessions to. In many cases, people spend their time and energy thinking through what items to leave to which of their heirs.

In other cases, the energy might instead be expended not on what to leave someone, but whether to leave them anything at all. Disinheritance can be a tricky proposition, both from an interpersonal perspective and a legal one. To learn more about how the process works, keep reading.

Why disinherit?

This is an incredibly difficult question to answer generally as the decision to disinherit is quite complicated and very personal. In some cases, disinheritance occurs because of a sudden event. A nasty divorce in the family could cause a schism, a sudden recurrence of addiction, an incident of abuse, in some cases, it may be a particularly upsetting argument. Other times, the disinheritance is the product of years of issues and estrangement that have gradually gotten worse, prompting the person making the will (the testator) to finally decide that enough is enough. Each instance of disinheritance is different given the complex personal relationships wrapped up in such decisions.

Who can and can’t be disinherited?

You may think that because the money is yours you can do with it what you want. While that’s generally true, there are some limits that are worth keeping in mind. Across the U.S., the rule is that you cannot disinherit your spouse. One exception is if your spouse agrees to be disinherited, either in a pre- or post-nuptial contract, then it might be possible. Even in the case of a prenup, disinheritance isn’t allowed in Georgia, where everyone is entitled of at least one year of support following the death of their spouse. It should be noted that these rules only apply to current spouses. Recent divorces don’t count and former spouses can be safely disinherited.

What about children? In almost every state in the country you can disinherit children as you wish. The only limitation occurs in Louisiana, of all places. The law in Louisiana says that a parent cannot disinherit children who are younger than 23, who have mental or physical incapacity or who are incapable of taking care of themselves. Except for these very narrow circumstances, disinheritance is legally acceptable.

Beyond these restrictions, the general rule is that you can disinherit whoever you like. It’s your money, and you can control who gets it (and who doesn’t).

Is disinheritance the right call?

Though disinheriting your child (or grandchild, or other relative) may be legally acceptable, that doesn’t necessarily mean it is socially acceptable. Saying you want to disinherit someone sounds easy enough, but can be much more difficult in practice. To make such a bold move is almost assured to damage, often irreparably, your relationship with the person being disinherited. It’s also likely that the ripple effects will extend beyond this person, perhaps harming your relationship with that person’s close friends and family who disagree with your decision. Before making the movie, think long and hard and be sure this is a decision you’re ready to own.

Other options besides disinheritance

Rather than take what some consider to be the nuclear option of disinheriting a loved one, another solution worth considering is creating a trust. How does a trust help in this situation? Rather than simply writing the person off, a trust can be used to control the heir’s inheritance, creating limits that prevent the person from using all of the money at once. You can use the trust to creative incentives for working or going to college or staying drug free. You can also place others in charge of disbursing money to the heir, ensuring that the loved one never has direct access to the asset.

An experienced Minnesota probate lawyer can help walk you through the complicated process of establishing a workable estate plan. For more information on estate planning in Minnesota, along with a variety of other topics, contact Joseph M. Flanders of Flanders Law Firm at (612) 424-0398.

Source: “How to Disinherit Loved Ones—And Which You Can’t,” published at CNBC.com.

Why Married Couples Should Discuss All of Their Estate Planning Goals

Posted on May 18, 2015 by jlawyer

Most Minnesota estate planning attorneys encourage couples to create separate Wills since many of them enter marriage with separate property and others inherit it later on.

In addition, a number of today’s newlyweds often have children from prior marriages that they’d like to provide for in the future — and creating separate Wills makes this much easier.

Regardless of your age upon marrying, you and your spouse can more easily achieve your various estate planning and financial goals by discussing them prior to obtaining separate Wills. This often proves crucial since both spouses often work for many years and need to make early decisions about setting up employer-sponsored 401(k) and other benefits.

Your early discussions can facilitate saving up for discretionary travels and even a possible second, vacation home. Your Minnesota estate planning attorney can help you get started by explaining the different types of estate planning tools that are currently available.

Critical Topics Couples Should Discuss Regarding Their Estate-Planning Goals

Decisions involving any children you may have. Apart from discussing how many children, if any, you may want, it’s important to realize that you’ll need to agree on the best ways to provide for your children’s education – preferably in a manner that won’t interfere with your retirement savings plans. You should even specifically discuss what percentage of your children’s college or graduate school expenses you’ll be willing to shoulder, based upon your current and future income;
Where do you hope to live once you reach your 70s or later years – and how do you want to try and finance that lifestyle? Growing older always happens much faster than we expect. This is why you and your spouse should give thought early on to where you hope to live day once health and mobility issues make changes necessary;
Discuss your willingness to purchasing long-term care insurance policies now. These are often quite expensive and can usually only be purchased before you enter your “golden years.” If you don’t buy these, the surviving spouse may one day have to spend a considerable amount of your combined wealth to pay the inevitable “last medical” expenses so many health insurance policies always try to avoid covering. Of course, you should both also plan on buying the most comprehensive (yet cost effective) basic healthcare insurance policies you can afford;
What extended family obligations do you both need to address? Often at least one spouse will have an elderly parent needing some financial assistance. If that spouse doesn’t have any separate property or wealth, you’ll need to decide what the two of you can start doing now to try and provide for this person’s needs. Likewise, if either of you have a child who is disabled in any way, you must also discuss how to make future provisions for that person;
Travel and vacation goals. Do you have long-term travel goals you both wish to start financing now?
Future schooling for either spouse. Is there a chance either one of you will return to school one day — either to complete a degree or obtain training in an entirely new field? Be sure to discuss how you might create a highly flexible education savings plan that could accommodate this future possibility;
Investment decision making. Which one of you should possibly take the lead with making investments for the two of you?

Minnesota Estate Planning for Married Couples

Although this list isn’t intended to be fully comprehensive, it should help newly married couples start setting priorities early on – while also obtaining their Minnesota estate-planning attorney’s advice on which tools can best help meet most or all of these goals. It may also be wise to hire a financial planner who can provide additional insights while you’re obtaining a full portfolio of estate planning documents from your lawyer.

To talk more with a Minnesota attorney on this topic, call the law firm at 612-424-0398.