MN Probate Law | IRS Transcripts in Lieu of Estate Tax Closing Letters

Posted on March 17, 2016 by jlawyer

MN probate estate tax return The Internal Revenue Service (IRS) has issued an opinion that transcripts may be used by personal representatives instead of waiting for the traditional tax closing letter.

MN Probate Estate Tax Return

Traditionally, in a taxable estate, the personal representative and, vicariously, the attorney for the estate would be responsible for waiting to close out the estate until the final estate tax closing letter was received. This often took a long time.

In essence, after the personal representative petitions and is appointed by the proper county court, and issued letters, testamentary, that person would then gather assets, pay debts, and administer the estate. One of the implications of administering the estate are paying all necessary estate taxes.

Transcripts in Lieu of the Closing Letters

As reported by the IRS, account transcripts, “which reflect transactions including the acceptance of Form 706 and the completion of an examination” may now be used as an “acceptable substitute” for the traditional closing letter.

Typically, the probate estate tax return will be prepared by a qualified tax professional. If you are not sure what this means: contact a qualified tax professional.

For all estate tax returns filed on or after June 1, 2015, the estate closing letters will be issued only upon request. Instead, the account transcripts can be used. The transcripts are available online to all tax professionals. Remember what I recommended about contacting a qualified tax professional?

According to the IRS: “the account transcript from the Transcript Delivery System (TDS) reflects transactions including the acceptance of Form 706 and/or the completion of an examination.”

How does this effect a Minnesota Probate?

It is my hope as a practicing MN probate lawyer, that this change will mean quicker processing of estate tax returns and, more importantly quicker estate administrations. I have personally waited for a closing letter for nearly five months. Being able to move forward on a transcript basis should be helpful. I am somewhat leery of the implications of “faulty” transcripts and the lack of an “official” opinion.

MN Probate Estate Tax Return Lawyers

Contact the Flanders Law Firm today. The firm offers consultations to all potential clients. Call (612) 424-0398.

MN Probate Law | Basic Financial and Grief Advice for Recent Widows & Widowers

Posted on March 4, 2016 by jlawyer

As we grow older, we discover that no one can ever be truly “ready” to lose a spouse. Read on for more information about widow grief advice.

Even if you’re the sole caregiver of your husband or wife, the actual moment that person “passes away” or dies nearly always feels like a devastating loss – an event of immeasurable proportions. Efforts to try and regain your emotional and financial balance after this type of loss can seem futile – especially if you did little or no advance financial planning together.

However, whether your spouse has already passed away – or you’re currently struggling to take care of a seriously ailing husband or wife, you should be able to pick up some useful tips below to help you better prepare for the future – including estate planning. These suggestions can provide new steps toward growth for you personally – or you can share this information with someone you know who may need this type of help soon.

Widow Grief Advice | If Your Spouse is Still Alive — Have an Open Talk About Finances — Now

Do yourself and your spouse a big favor by immediately having a specific discussion about the current state of your finances. Gather up all of your individual paperwork and tell each other where all of your banking and investment accounts are located – and share the passwords for all online accounts with each other. Consider buying a large, spiral address book so you can record all of this critical information in it. You can list each account alphabetically. Be sure to update this information annually and keep this book or ledger in the same, secure location. (Creating a back-up copy would be very wise).

Here are some additional tips for regaining your financial and emotional footing after a spouse’s death – many of them are based on a recent New York Times article. These steps can help you move through what that Times article refers to as “the fog of grief.” Although women still tend to live longer than men and there are more widows in America than widowers, these tips should prove just as useful for men as for women.

Tips for More Quickly Regaining Your Financial/Emotional Balance After a Spouse Dies

Don’t hurry out and spend money on anything unnecessary. Many surviving spouses often feel a strong urge to go out and make a major purchase all on their own. While it’s one thing to simply buy a new couch or trade in a used car for a reasonably priced new one, it’s another thing to hurriedly sell your home and buy tickets for international travel;
Ask widows and widowers you know where you can find and join a good support group. Whether you’re active in a local house of worship, a community activity group – or even just a weekly poker or knitting group, chances are someone there has recently been through what you’re having to cope with and can provide you with the name of a local grief support group. If you cannot find this type of group, call up a local psychologist or senior center and ask for their recommendation. Joining this type of group can almost instantly help you feel “less alone” and more like someone who’s definitely going to move forward successfully – and do just fine;
Realize that about half of all men and women lose their first spouse around the age of 59 or 60. Accept reality and know that both of you will probably not live into your late 70s or early 80s. While some couples are that fortunate – you need to hedge your bets and share all you can now about all of your marital finances. A person can look incredibly healthy, exercise regularly and still have an unknown “DNA time bomb” that can suddenly cause him or her to suffer a fatal stroke or heart attack;
Hire a trustworthy, highly recommended financial advisor right away – and meet with your Minnesota estate planning attorney. Your lawyer can help you locate and properly interpret your various investment documents – and your financial advisor can help you begin deciding how to invest any new funds coming your way. Both of these professionals can provide their opinions about how you can best move forward;
Avoid letting your adult children, siblings or other relatives overrule your judgment, especially if you’re moving forward in a conservative fashion. Also, be wary of the small percentage of “professionals” who view recent widows or widowers as “easy marks” to make themselves rich at your expense. Always get a second or third opinion from friends and professionals before making any new, major financial decisions;
Don’t just say “I’m not good at math” and expect a financial advisor to make all of your major decisions for you. Be willing to sign up for a simple, straightforward online course (you can often find one that doesn’t assign grades) – that can help you become more financially literate. Since your investment portfolio will likely need to change over time – you must be able to talk intelligently with your financial advisor about all of your options. If you still feel very intimidated – ask around and see if a local university or community college offers a short-term class on financial investments. Your financial advisor should be able to suggest either an online or community program to you;
Look into groups like “Sisters on the Fly,” “The Red Hat Society” — or for men – The National Widower’s Organization. Members of these groups can often help you move through the different grief stages – locate a good, local financial advisor — and start reaching out and enjoying life again with other group members;
Always respect this general rule of thumb – never make any major expenditures for six months to one year after your spouse dies. While exceptional circumstances can require ignoring this key advice – lovingly realize that you won’t be your “true self” again for at least that long.

Finally, consider meeting with a professional grief counselor or basic therapist to help you better understand your vacillating feelings and frustrations as you get to know yourself as a single man or woman – who also happens to be a widow or widower. After all, new beginnings are always possible for each one of us.

Minnesota Estate Planning/Probate Attorney

Contact the Flanders Law Firm today. The firm offers free estate planning consultations to all potential clients. Call (612) 424-0398.

MN Probate | Final Income Tax Return

Posted on March 2, 2016 by jlawyer

Questions about filing the final income tax return for your loved one?

Read on.

My office receives many questions that are very similar. Here is a common question: Do I need to file an final income tax return for my deceased relative? The simple answer: probably.

Filing Requirements of the Final Income Tax Return

The personal representative of a probate estate in Minnesota is required to file any necessary income tax returns for the deceased. Please see I.R.C. 6012(b)(1) for more information. The final return is due on April 15 of the year following the person’s death. The tax year ends on the date of death. Therefore, if a person dies in 2015, the income tax requirements end in 2015. No 2016 return would likely be due.

Furthermore, the personal representative of a deceased’s estate is responsible for filing any other unfilled income tax returns that the deceased person did not file. The personal representative can ask for an extension of time to file the final income tax return if that is necessary.

How do I notify the IRS that I am now representing the deceased?

The Internal Revenue Services (IRS) uses Form 56 “Notice Concerning Fiduciary Relationship”. A person needs to fill out that form and provide it to the IRS. Although this form does not have to be filed with the IRS, it is a good idea because otherwise the IRS will not know who to send information and a possible refund to.

Minnesota Income Tax Return

A Minnesota Income Tax Return should also be filed by a personal representative with the Minnesota Department of Revenue. Extensions, and the like can also be requested. Please remember that the personal representative simply acts as if they were the deceased.

EIN Numbers

All estates are required to apply for an obtain an emplyer identification number (EIN) from the IRS. The probate attorney will normally handle this for you. The EIN will be used to identify the estate and any tax returns related thereto. The EIN is also used to start an estate bank account. This account is used to gather all estate funds and issue disbursements to creditors, heirs, and beneficiaries of the estate. Finally, when the estate is winding-up, the bank account transactions are accounted for in a final accounting.

Free Initial Consultations

Questions about first time personal representative duties? Contact the Flanders Law Firm today. The firm offers free consultations to all potential clients and Dakota County probates. Call (612) 424-0398.

Minnesota Probate | How do I get letters testamentary?

Posted on December 9, 2015 by jlawyer

Many clients call my office with similar questions. One of the main questions I get is: how do I get letters testamentary in Minnesota? I will try my best to answer that question in this post.

How do I get letters testamentary in a Minnesota Probate?

There are many issues that should be analyzed prior to starting a Minnesota probate. I have recently written several posts on the topic of starting a Minnesota probate. Please read them and then continue on with this post.

In this instance, I will assume that either a meeting with the probate registrar has happened or a hearing with a district court has happened. In order to receive letters testamentary from the court, certain court pleadings (documents) must be filed with the court.

Notice

Notice is one of the hallmarks of the law. Notice is often referred to as “due process”. If you don’t know what that means, contact a probate lawyer. Basically, each personal representative and their lawyer must give notice to “interested parties”. Interested parties include heirs of the estate and creditors of the estate.

In an informal probate, a Notice for Informal Probate of Will (assuming there was a Will) and a Notice to Creditors needs to be approved by the court. From there, two things should happen: (1) a copy of that court-approved notice should be filed in a newspaper of general circulation in the county where the deceased person resided, and (2) the personal representative must mail a copy of the notice or a clipping from the newspaper to all interested persons.

Who should the notice be provided to?

The probate notice, in addition to being published in the newspaper, should be mailed to the following individuals:

Surviving Spouse
Adult Children of the Decedent
Minor and Adult Children of the Decedent
Heirs, Devisees, and Anyone Named in a Separate Writing
Creditors
Foreign Consul
Attorney General
Commissioner of Human Services

What should I do after I have provided notice?

The court always wants proof. Proof comes in the form of documents. Thus, the personal representative needs to provide the court with an Affidavit that they provided the proper notice to the above parties. Failure to tell the court that this was done will certainly result in a failure to receive letters testamentary.

Furthermore, an “Affidavit of Notice to the Commissioner of Human Services” must be filed. Just like the Affidavit of Service, this Affidavit shows the court that the personal representative gave the proper notice to the state of Minnesota. Why is this done? Because the Commissioner of Human Services keeps track of all medical assistance claims paid by Minnesota for expenses of last illness and care. This is often referred to as “medical assistance”. I have also written posts on probate and medical assistance issues. Feel free to read those posts for more information.

Finally, an Affidavit of Publication must be filed with the court. The Affidavit is often sent to the court by the newspaper where the initial notice was published. The newspapers don’t always do this, so the personal representative and their attorney need to check on this.

Receiving Letters Testamentary

Assuming all of the above was completed by the personal representative and the probate attorney, the court will issue Letters Testamentary (or, in the case of a person who died without a Will, Letters of General Administration). Finally, this is also assuming that the estate was started properly. The probate begin with the filing of a Petition or Application with the court – which is something I did not cover in this post. Please read the links above for question on that issue.

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Selling a Home or Real Estate in a Minnesota Probate

Posted on December 8, 2015 by jlawyer

Do you have questions about selling a home or real estate in a Minnesota Probate? Read on for answers.

Selling a Home or Real Estate in a Minnesota Probate

This post will examine a number of issues and problems which may arise from the sale of real estate by a personal representative and their attorney. There are special circumstances surrounding the management, sale, and distribution of real estate in a Minnesota probate. At times, the sale or real estate in a probate can be tricky.

Powers of a Personal Representative to Sell Real Property

To begin, it is important to keep in mind that Minnesota law provides detailed guidance on the sale of a home or other real property in a probate. Specifically, Minnesota statutes provide the personal representative of an estate broad powers over real estate. The applicable statutes are in section 524.3-715. Some of the most important powers include:

the power to gather and invest the real estate
the power to make any necessary repairs to the real estate
the power to subdivide and develop real estate
the power to sells, mortgage, or lease the real estate
the power to execute deeds and other documents of conveyance

Finally, a personal representative can enter a lease which may exceed the anticipated length of the probate estate. Clearly, Minnesota law grants a personal representative extensive powers over Minnesota real estate in a probate estate.

Management of the Real Estate

If a deceased person had an interest in a home or other real estate – be it in Minnesota or elsewhere – a personal representative must think about many issues when the probate begins.

A personal representative, and their attorney, should be concerned about proper liability and/or casualty insurance on the property. Obviously, it is extremely important that a home or other real estate is insured. Often the insurance on a home may lapse at death. Or, there may be contractual obligations which must be taken care of quickly upon death. One simple example is the failure to make premium payments which often results in a lapse of insurance coverage.

Another concern of the estate will be the mortgage on the home or other security agreement. Obviously, if the real estate has a mortgage on it, the personal representative needs to be concerned about how it will be paid so that it does not go into foreclosure. Furthermore, many companies are concerned about vacant properties and what to do about them. Much like a mortgage on a parcel of real property, the personal representative should be concerned about property taxes and other costs like leases .

If you or someone you know has questions about selling a home or real estate in a Minnesota probate, please contact Joseph M. Flanders at Flanders Law Firm LLC.

Free Initial Consultations

Starting an Informal Probate in Minnesota

Posted on December 7, 2015 by jlawyer

Do you have questions about starting an informal probate in Minnesota? Read on.

An informal probate proceeding starts when an “application” is filed with the appropriate probate registrar in the county of venue. What does that mean?

In essence, the proper venue is a the place where the deceased person (decedent) lived permanently at the time of his or her death. There is a question of interpretation of the term “permanent”. If you have questions, a MN probate lawyer should be consulted.

Starting an Informal Probate in Minnesota

The application must contain certain information. The required information is set forth in Minnesota Statutes, section 524.3-+301, the MN probate court rules, and the local county level rules.

The probate application must be accurate in its details. This is because the information in the application is the basis for all subsequent finding made by the registrar. Once the application is signed by the personal representative of the estate, the attorney and the personal representative can set up a meeting with the county registrar. Whether a meeting is required is up to the county and registrar. Check your local rules to see what is required in your county. Sometimes the hearing may only be a telephone call with the registrar.

Items which need to be in the Probate Application

Some of the major items that must be in the probate application include:

The decedent’s full legal name, any prior names
The decedent’s date of birth and date of death
The personal information of the personal representative
An explanation of why venue is proper in that particular county
An explanation of whether a Will existed or whether the decedent died intestate
A list of the “interested parties” or the heirs and creditors of the estate
Whether the will requires a bond
Whether the will requires a formal or informal personal representative
Whether there are any complications with the heirs
Whether there are any complications with the Will
An identification of the property and debts of the estate
Other information

There is no right or wrong answer to exactly what has to be in a probate application in Minnesota. However, a probate attorney should be consulted to make sure all the requirements are met. Every case is different and different laws apply to different facts.

Appearances of Counsel

Appearance requirements also vary from county to county for informal probates. In many counties, the application may be filed by mail and no appearance is necessary. In other counties, a formal attorney appearance may be required. Sometimes a mail filing is sufficient; however, many counties are now requiring e-filing.

If you have questions about your county, contacting the probate registrar’s office is a good idea. The probate registrar’s office may be able to provide the local probate rules to you.

Meeting with the Probate Registrar

After the application is filed and accepted, a meeting with the probate registrar should be scheduled. The attorney and personal representative should bring the application and the will, as well as any other supporting documentation. The attorney should also be sure to bring the personal representative’s acceptance of appointment and oath. This is an important document because it provides the basis for the personal representative’s fiduciary duty to the rest of the heirs.

Once the meeting with the probate registrar is over, the registrar will either approve the application or ask the estate to re-file as a formal administration. Whether a formal administration is required is a subject of another post. As always, for questions on starting an informal probate in Minnesota, an attorney should be consulted.

Free Initial Consultations

Questions about starting am informal probate in Minnesota? Contact the Flanders Law Firm today. The firm offers free consultations to all potential clients. Call (612) 424-0398.

Starting a Minnesota Probate Estate | MN Probate Law

Posted on December 3, 2015 by jlawyer

Starting a Minnesota probate estate usually means filing a “Petition” or “Application” with the district court located in the county of the deceased person’s (decedent’s) last known address. Attorneys call this “venue”.

Whether a Probate Petition or Application should be used depends on the nature of the estate. For question on this issue, a probate lawyer should be consulted.

Minnesota Probate | Choosing Informal or Formal

Basically, if problems or issues may arise from the estate administration, a formal probate is usually the best option. This means that the personal representative’s actions will always be approved by the court. This protects the heirs because the court is supervising the personal representative. This protects the personal representative because the court will approve their decisions without fighting or back-biting from angry heirs or siblings.

Below are common issues which the law firm has seen created by heirs in starting a Minnesota probate estate:

Distributions will be made to a minor heir or devisee (person who receives money from the estate)
There may be confusion about the identity of heirs
The whereabouts of heirs is unknown
There is a possible issue with the state due to lack of heirs
There may be an inaccurate description of the heirs.
There may be illegitimate children of the decedent
The requirements of the Will cannot be satisfied and the personal representative needs court approval
There are existing disputes among the heirs and the personal representative
An heir or devisee caused the decedent’s death

Starting a Minnesota Probate Estate | Problems with the Will

Furthermore, common issues that arise which create the need for a starting a formal estate include:

A problem with the Will
The original Will is lost
There are handwritten changes to the Will
A separate writing is listed in the Will but cannot be found
The court cannot understand the Will
There is a need for a will construction due to an confusion or mistake in the Will
The Will does not contain a residue clause
The Will fails to nominate a personal representative

Real Estate in the Initial Probate

If the probate proceeding includes real estate, the real estate (home or otherwise) will need to be included. This means finding the legal description and deed containing the last known ownership interest on the real property. This can be found at the county recorders office in the county where the decedent lived or where the real estate is located.

Also, keep in mind that if the real estate will not be sold during the probate, a personal representative will likely want to proceed in a formal administration. This is because many county recorders offices will not recognize a probate registrar’s determination of the heirs, which may cause the title to be unmarketable when it is later transferred to another party. If, however, the intent is to sell the property during the administration, or if the will includes a specific person who will get the home or real estate, in most cases, a personal representative can proceed in an informal probate.

In all cases, if you have questions about how to deal with real estate in a probate, a lawyer must be consulted. Failure to properly title and transfer real estate is one of the most common reasons for personal representative liability for negligence in handling the estate.

Insolvent Estates in a MN Probate

An insolvent estate is one which has more debt than assets. In other words, the deceased person owed more money to people than they actually have in their estate.

Having an insolvent estate is one prime reason to start a formal proceeding. This means that the personal representative and the lawyer will be responsible for, essentially, cleaning up the estate, paying bills, and then filing a closing statement with the court. It is easy to understand how people or companies might be made when they do not get paid what they feel they are owed. However, this is often the job of the probate estate. The personal representative and the attorney should be very careful in this situation. Finally, again, court supervision of the probate estate is ideal.

Free Initial Consultations

Questions about starting a Minnesota Probate? Contact the Flanders Law Firm today. The firm offers free consultations to all potential clients. Call (612) 424-0398.