MN Estate Planning FAQs

Confused About Estate Planning? We Have The Answers.

Estate planning can be very complex. There are many elements that go into creating a strong estate plan, so it’s natural to feel confused and overwhelmed. Our Minnesota estate planning attorneys at Gries Lenhardt Allen, P.L.L.P., are well-versed on the estate planning laws and will help you find the right solutions for your unique needs.

This page offers an overview of the most common questions we receive about estate planning. We hope it can guide you through the process as you begin your estate planning journey.

• What is the difference between a will and a trust?
• Do I need an estate plan if I already have a will?
• How can we protect our estate from being overly taxed for our heirs?
• How is owning property in multiple states handled in an estate plan?
• How often should I review and update my estate plan?
• Are there specific estate planning considerations for business owners?
• Can I avoid probate in Minnesota? If so, how?
• Are there specific strategies to handle estate planning for blended families?
• What are the legal requirements for a valid will in MN?
• How do I handle my digital assets in my estate plan?
• What happens to my estate if I die without a will or estate plan in place?
• How does a living will differ from a last will and testament?

What is the difference between a will and a trust?

Wills and trusts are some of the most crucial documents included in an estate plan. Both can specify how you want to distribute your assets after death. This can include passing assets down to loved ones or giving money away to charities of your choosing.

A will allows you to designate guardianships for minor children or pets so they’re taken care of after you pass. A will should also determine your personal representative who will administer your estate after your death.

A trust is a completely different type of legal tool. Trusts allow you to place assets into a separate legal entity – the trust – for safeguarding. A trustee (either a person or an institution) is assigned to manage the trust (and the assets within) for your designated beneficiaries. Trusts offer a more streamlined way of transferring assets after death as they don’t have to go through probate and are more private.

Both of these tools offer specific benefits and help build a comprehensive estate plan. Learn more about the differences between wills and trusts.

Do I need an estate plan if I already have a will?

It’s a common misconception to think a will is enough. While wills are crucial for adults, it’s only one key piece of an estate plan. A will only covers certain aspects of estate planning, such as how to pass down your assets, guardianships, your funeral wishes and your personal representative.

An estate plan is much more comprehensive. It includes other crucial documents for future planning such as medical and financial powers of attorney. These documents help you assign someone to act on your behalf when it comes to certain medical and financial decisions, particularly when you are incapacitated or otherwise unable to make those decisions yourself.

Without an estate plan, you may be leaving some of these choices up to chance in the future. By organizing your wishes into a thorough plan, you can feel more confident for whatever may come.

How can we protect our estate from being overly taxed for our heirs?

Estate taxes can reduce the value of your estate, which will reduce the amount that goes to your beneficiaries. Protecting your heirs from being heavily taxed is a common concern for many people creating an estate plan. There are many ways to reduce or avoid taxes, including transferring assets as gifts to family members or making charitable donations. The most common option is to create a trust. By putting certain assets into a trust that is managed by an assigned trustee, you can protect those assets from being taxed. After your death, the trustee will then distribute the assets to your beneficiaries according to the trust agreement.

There are various types of trusts to consider, and working with a knowledgeable attorney can help you choose the right option for your needs.

How is owning property in multiple states handled in an estate plan?

It’s common for many Minnesotans to have properties in different states. When it comes to estate planning, this can pose certain complications because every state has its own unique laws regarding real estate transfers upon death. It’s crucial to include all your properties in your estate plan and how you want each to be handled when you die – whether that’s to sell, pass down to a beneficiary or give away as a donation to a charity.

For example, if you have a vacation home in Arizona, the probate laws of Arizona will apply to that home. The home may also be taxed differently accordingly to Arizona laws instead of what you expect in Minnesota. As multistate estates can be complex, it’s crucial to work with a lawyer who is familiar with these intricacies. We can help you build the right documents to handle each of your out-of-state properties.

How often should I review and update my estate plan?

There’s a common misconception that an estate plan is one-and-done. Instead, an estate plan is a living and breathing document that needs regular revision to stay up to date. It’s up to you how often you want to review your estate plan, but every three to five years is a general recommendation.

A good rule of thumb is to review and update your estate plan after major life changes such as:

• A marriage or divorce
• The birth or adoption of a child
• Purchasing a large asset such as a home
• Starting or ending a business
• Significant health issues such as an illness or disability

It’s also wise to revise a plan if anyone you named previously as a guardian or personal representative has died or is no longer available to take on that role.

By routinely reviewing an estate plan, you can rest assured that your wishes are up to date and ready when necessary.

Are there specific estate planning considerations for business owners?

Business owners can face unique challenges when it comes to estate planning. Along with creating an estate plan, you should also have a business succession plan that outlines how you want to transfer leadership if you suddenly fall ill, become disabled or pass away. A succession plan will help ensure your business continues running smoothly without you at the helm. Our attorneys have business law experience that can help you build a strong plan to protect your company.

Can I avoid probate in Minnesota? If so, how?

Avoiding probate in Minnesota is possible if you take certain steps beforehand. Probate is a complex and often lengthy process that can cost your heirs time, money and stress. By planning ahead, you can minimize the risks of your estate getting stuck in probate after your death.

As explained above, creating a trust can help protect assets from taxes as well as from probate. Charitable donations and gifts can also bypass probate and allow your heirs to receive their inheritances more seamlessly. Some assets are already exempt from probate such as joint tenancy properties, retirement assets with beneficiary designations and payable-on-death accounts.

Are there specific strategies to handle estate planning for blended families?

While estate planning for blended families isn’t inherently any different, there are certain factors that need consideration. As there are often more people involved in blended families, estate planning can become more complicated.

Every family is different, and figuring out your unique needs is how we can help. By utilizing trusts and other estate planning documents, we can help you establish a smart plan for protecting your loved ones and distributing your assets fairly.

What are the legal requirements for a valid will in MN?

Creating a will is often the first step in building an estate plan. A valid Minnesota will requires you to be at least 18 years old and of sound mind. You must submit the will in writing, signed by you and two witnesses who are over 18 years of age.

How do I handle my digital assets in my estate plan?

Digital assets are increasingly common in today’s age and shouldn’t be overlooked when creating an estate plan. Online bank accounts, social media accounts, emails, digital photos and videos, blog content, cryptocurrencies, non-fungible tokens (NFTs), airline miles and other digital assets are all digital property that should be addressed in your estate plan.

You can request to have online accounts closed or deleted or choose to transfer them to a beneficiary. It’s important to outline your wishes and provide login details for all your accounts so they can be accessed after your death.

As digital assets are still relatively new in the estate planning world, it’s all the more important to work with a lawyer you can guide you through the steps.

What happens to my estate if I die without a will or estate plan in place?

Without a will or estate plan, your estate will be “intestate.” This means that your estate will now follow the state’s laws regarding intestacy. Instead of distributing your assets as you may have wished, your estate will pass down according to Minnesota’s default rules. In Minnesota, your spouse is first in line to receive your estate; if they’re not alive, then it will be distributed fairly among your children.

By creating a will, you can ensure that your estate is distributed the way you want.

How does a living will differ from a last will and testament?

The key differences between these two legal documents lie in the first words: “living” versus “last.” A living will functions while you’re still alive and outlines what medical care you want in an end-of-life situation. This document can also provide directions for organ donations, life support and other medical treatments.

A last will and testament contains all your final wishes for distributing your assets and caring for minor children. It only takes effect when you die.

Still Have Questions? We’re Here To Help.

We know that estate planning can be overwhelming. It’s easy to get lost among all the different documents you need to prepare and all the laws you need to follow. We are skilled in navigating the complex estate planning process and are dedicated to guiding you every step of the way.

Contact our firm today at 612-568-0023 to schedule an appointment. You may also complete our online contact form to send us information about your legal needs; however, the submission of the online contact form does not create an attorney-client relationship.