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Learn some of the most commonly asked estate planning questions and answers.

Q. What is conservatorship/guardianship?

A guardian is someone appointed by the courts to make personal decisions, typically a spouse, adult child or another relative. If someone becomes incapacitated and unable to make decisions for himself or herself, a guardian is appointed. A conservator is appointed by the courts to make financial decisions on behalf of a protected person. Financial decisions such as paying expenses, making investments and entering contracts are handled by a conservator. In most cases, with proper planning, court involvement can be avoided or minimized.

Q. Who is appointed to be a guardian or conservator?

Typically, a spouse, parent, adult child or other trusted individual.

Q. What is probate, and how can it be avoided?

Probate is a court proceeding. The primary purpose of probate is to change the title of assets from the deceased person to the beneficiaries. Many people assume they can avoid probate simply by having a will-based plan. However, that is rarely the case. Most people with will-based plans will still need a probate proceeding to transfer their assets to the beneficiaries. A properly drafted and funded trust can avoid probate.

Q. What factors determine how long a probate proceeding can take?

Probate proceedings usually take at least four months and can last up to several years. How long the probate process will take depends on several factors such as, whether a formal or informal proceeding is required, the type of assets in the estate, and if an interested party contests the will.

Q. What are the benefits of avoiding probate?

A probate process costs time and money due to court involvement. To avoid probate, a person should have an experienced attorney create a trust.

Q. What are some ways to avoid probate?

Plan ahead, and create a trust. A trust is an important tool which can determine what happens to your assets when you pass away. If there's a trust in place, your family and beneficiaries can inherit from you without a time-consuming, expensive probate process. Trusts can also offer a tax benefit.

Q. What does it mean to fund a trust?

To fund a trust, you must transfer ownership of assets from you to the trust by changing the titles from your name to the name of your trust.

Q. What are some types of assets that should be retitled into the name of the trust?

  • Stock and bond original certificates
  • Non-retirement investment and brokerage accounts
  • Personal property/personal effects, cars, livestock and jewelry
  • Cash accounts, including money market accounts
  • Non-qualified annuities
  • Business interests, such as stock shares in a corporation
  • Life insurance

Q. What types of assets cannot be retitled into the name of the trust?

Retirement accounts such as IRAs, 401(k)s, 403(b)s and qualified annuities, medical savings accounts, HSAs, uniform transfers or uniform gifts to minors, and in some situations, life insurance and motor vehicles. An experienced estate planning attorney can determine exactly what you can retitle.

Q. What are some mistakes clients make when funding a trust?

The most common mistake is forgetting to retitle assets into the trust. Assets must be retitled to be held within the trust, including any newly acquired real estate.

Q. What happens if a trust is not funded?

It remains as is, empty, with no assets. The trust becomes useless because it does not control the management or disposition of any assets. Therefore, a probate proceeding will probably be necessary, which is what you were trying to avoid in the first place. This is the most common reason trusts fail.

Q. What happens if I become mentally incapacitated or otherwise unable to handle my affairs?

A power of attorney is someone you deem to have the legal authority to make medical and end-of-life care decisions for you. Note: A power of attorney may not be valid after you die. If you have a trust, your designated Trustee(s) can immediately begin managing the trust assets.

Q. I have a child with special needs. Do I need to do any planning?

If you have a child with a serious disability, it is imperative you plan ahead with a trust. A dependent with special needs may be financially dependent on others, and a trust can be set-up to provide for your child for as long as they live. Eligibility for government benefits needs to also be considered in the case of a special needs dependent.

Q. Why is it important to err on the side of caution when searching for estate planning answers online?

Every state has different laws. Many online sites provide information that is not necessarily correct for Minnesota. Some sites provide documents that may not hold up in court when the actual situation occurs. An attorney can help to make sure your documents and planning are done accurately.

More Estate Planning Questions? Ask Me In Person.

I am happy to help you explore any estate planning concerns. Call 651-478-8999 or email me to inquire about a consultation to get started with an estate plan.

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