Wednesday, November 28, 2012

I Did a Will Years Ago and Need to Make Changes. How Do I Do That?

If you’re looking at a will that’s a few years old, you might see things you want to change. The natural inclination is to scratch what no longer makes sense and write in a new direction. This is not permitted in Minnesota. How is a probate judge supposed to know that someone else didn’t find your will and scratch out the parts they didn’t like? In order to be recognized, changes must be done in the same way the will was done in the first place, most importantly by having two disinterested people witness the change. One option is a codicil, or amendment, to the will. This works well for straightforward changes like who serves as personal representative. If there are a lot of changes to be made or if you don’t want interested people to later on find out you made a change, you should consider doing a brand new will. If your old will doesn’t reflect your current intent, speak with a licensed attorney to make sure your changes are recognized.

Thursday, October 25, 2012

If You Get a Divorce, You Need to Do Estate Planning.

If you've gotten a divorce, you no doubt have had your fill of attorney bills and court appearances, even in the best of circumstances. But, just because your divorce is final, doesn't mean all of the legal issues arising from the divorce are neatly tied up with a bow. If you have significant assets and minor children, you want to set up a trust to manage the money for them. Perhaps even more importantly, through proper planning you can choose who manages the money. This is important if your ex isn't exactly your first choice. Another sticky issue could be naming a personal representative to wrap up your affairs. If your estate needs to be probated, which is likely if you own real estate, a personal representative will be appointed. Prior to the divorce, your spouse would have been first in line to serve in that capacity and the court's natural choice. Now that you're not married, the best person to serve may not be clear. Which adult-child/parent/sibling should serve? Proper planning can let you let the court know who you prefer. After all, after going through a divorce, you out of anyone knows the importance of trying to avoid a court fight. Planning now can help avoid that for your loved ones.

Sunday, September 30, 2012

Repost: What do you mean by an estate plan?

I've been meaning to post on guardianships for the past two months... but I've always seem to found better things to do in Minnesota during the all too short summer months. So, here's an oldie but (hopefully) goodie from 2008.

An estate plan is an umbrella term that refers to a plan as to what happens when someone dies or is incapacitated. Issues to consider are where your stuff will go, who will take care of your kids, who will make my decisions if you can't make them, how to make the probate process quicker and less expensive, continuation of a family farm or business, and what the effect of taxes and state liens will be.

There can be many pieces of an estate plan depending on the needs of an individual. Something that just about everyone should have is a will. Without a will, the state will apply the fallback provisions in state law to determine who gets your property, which may or may not follow your intent. Additionally, dying without a will which can specifically call for an expedient probate process, can cause a longer, more expensive probate process.

Also, everyone should have a health care directive, which states who makes the health care decisions for you in the event of your incapacitation and gives direction as to your wishes. This health care directive needs to include a HIPAA waiver to allow the hospital to release protected medical information to this person.*

In the same vein, everyone should consider a power of attorney who can deal with your financial affairs in case of your incapacitation. However, once created, that person has as much right to your finances as you do and you should only execute a power of attorney if you have a trusted individual in place.

Besides these documents, other documents can be executed, trusts established, and business entities created which address your specific needs. This is why it is so important to contact a licensed attorney to look at all of your circumstances to craft an estate plan to fit your needs. 
 *Although HIPPA specifically allows for health care agents to obtain health care information, not all medical professionals are up to date on the intricacies of federal law. A waiver makes it clear to anyone that you desire your agent get the information they need to make a decision.

Tuesday, July 31, 2012

Obscure Will Requests, Olympic Edition

A few days ago, I had the best non-sports, sports radio station in Minnesota, KFAN, on in the background and a tidbit caught my attention. For those of you not familiar, during the 1972 Olympics, the US and Soviet men's basketball teams met in the gold medal finale. During the last few seconds of the game, confusion of officials, among other things, led to controversy as to whether the Soviets won fair and square. The US team declined silver and those medals still likely sit in some Olympic Committee vault in Switzerland. One of the players, Kenny Davis, was interviewed. His will reportedly states that his wife and descendants are prohibited from accepting silver.

In many ways, obscure will requests can be just that, requests. They can help inform family members about your wishes, but may have questionable enforceability.

Sometimes, these type of requests are viewed as "precatory" or "wishful" if the statement has any language demonstrating a recommendation, request, wish, or expectation (such as "I hope my family never accepts the silver medal") as distinguished from an express direction, (such as "My family is prohibited from accepting the silver medal"). In those cases, courts, Minnesota's included, have a history of going further than unquestionably applying the request, but rather dig deeper to determine what the true intent of the will writer (testator) was and attempt to look at the present day circumstances through their eyes to figure out what the person would have done, had they anticipated those circumstances. Sometimes, in using this test, a court ends up straying from the letter of what's in the will, for example in Long v. Willsey, 156 N.W. 349. The court in that case said it this way; "to ascertain and give effect to the intention of the testator should be the guiding purpose in construing a will. To that end the meaning of isolated clauses and paragraphs may be modified by the evident intention deduced from a consideration of the whole document."

Even if the wording is viewed as an express direction, practicality can be an obstacle. If one family member were to go against an express direction, say accepting a silver medal, other family members might want to bring an action to prevent it, but might not have the spare cash lying around to pay the legal fees to bring the question to court.

One solution to the money problem may be to condition other gifts in the will on following the request. However, Minnesota courts can ignore the condition if they determine the condition is against public policy. Although this is rare, care should be taken to reduce that risk.

In the end, obscure will requests can be complicated, both legally and practically, to enforce, but they can help communicate your wishes to your heirs, devisees, and personal representatives.

Here's a link to the KFAN podcast.

Here's a link to a Sports Illustrated column with more information on the controversy.

Oh, and U-S-A, U-S-A!

Monday, June 4, 2012

Great Post from Wills, Trusts & Estates Prof Blog: Four things to tell your kids about your estate plan.

This post on another blog was so good, I had to share.

Four Things You Should Tell your Children About Your Estate Plan

I might have to frame this and give it to each of my estate planning clients.

Wednesday, May 30, 2012

Sobering News for those on Social Security Disability Programs

There's sobering news from the Washington Post today on the solvency of Social Security programs for the disabled.

According to the article, these programs will be insolvent by 2016 and there is little appetite in Washington to fix it.

Both federal and Minnesota programs allow for people to create a special needs trusts or supplemental needs trusts to retain assets to pay for things that these programs don't provide. The concerning thought is what happens if these programs can't provide for those who need it in the future.

Wednesday, May 23, 2012

Can you just cross out the parts in an old will and write in what you want now?

Once you do a will, circumstances can change. The person you wanted to be your executor twenty years ago (we now call it personal representative) may not be the person you want to do it today. You may want to change who gets your estate or you may have sold land you described in your will. There are many reasons you might need to change your will. However, you can’t just scratch out the old stuff and write in the new. Under Minnesota Statute, wills must be signed and witnessed by two people. It’s also preferable that the two witnesses not have an interest in the provisions of your will. In order to ensure clarity in making changes and to ensure that will requirements are followed, any changes you make should be done through a document that the probate court and estate planners call a codicil. A codicil is a document that formally amends a will and follows the formalities, such as signing and having two witnesses, of a will. If you do a codicil, you should store it in the same place as your original will, so both will be located and filed with the court. If it’s been a while since you did your will, you should speak with a licensed attorney who can help you make sure you amend it properly, so that your estate plan meets your needs now.

Tuesday, April 3, 2012

More on E-estates and State Legislation

This morning, I heard an interesting report on how state legislatures are attempting to address how social media and other internet accounts are administered after the owner's death. Oklahoma, for instance, passed legislation that included powers to administer these account in the powers that personal representative have to administer estates.

Here's the link:

Here's more on e-estates.

Wednesday, January 18, 2012

Balancing Gifts from your Estate Amid Soaring Farmland Prices

For those of us in the upper Midwest, the news that prices for farmland are soaring isn't new. The Des Moines Register had a great article recently about how soaring prices are affecting gifts of family farmland.

The article rightly points out that, without proper planning, chaos can ensue if not all children are part of the farming operation. Soaring prices have greatly complicated things as it increases the burden on the farming children to compensate the others to get control of all of the land. There are some ways to address this issue. Giving the farmland to the farming children in your will while taking out life insurance to pay out to the others is one option. Another option is to place the land and operation in a qualifying entity that will control the land and fairly disperse proceeds. If you have a family farm, consider meeting with an attorney licensed in your state to do what you can now to keep the family farm going after you pass away.

Monday, January 9, 2012

Minnesota Estate Planning and Probate named an MSBA Top 25 Blawg of 2011! Thank you Minnesota Bar Association! Check out the link for more honorees.