OFFICE: 207 Chestnut Street Suite 150 Chaska, MN 55318 WEB: www.johnstonlawgroup.com TELEPHONE: (952) 556‐5200 (888) 706‐2244 FAX: (888) 706‐2244 WRITER’S E‐MAIL: [email protected]Dear Sir or Madam: Thank you for your interest in our Estate Planning Services. At JOHNSTON LAW GROUP PLLC, we assist individuals and families with all types of estate planning needs, from basic wills and revocable “living” trusts to more sophisticated planning techniques, such as irrevocable life insurance trusts, family partnerships, business succession planning, cabin succession planning, and charitable giving. Above all, we pride ourselves on providing personalized service to our clients, assisting them with all aspects of their estate planning. As such, we like to schedule a free one-hour initial consultation with you as soon as possible to discuss your estate planning needs. We encourage you to bring your other financial and personal advisors to this meeting, if you so desire. Please note that this initial one-hour consultation creates no obligation on your part: if at the end of the hour-long free consultation, you decide not to retain us for our estate planning services, you will not be charged for the meeting. However, if the initial consultation exceeds one-hour in length, we will charge you for the additional meeting time at rate of $50.00 per 15 minute increment (or portion thereof), payable at the conclusion of the meeting. For more information, please review the enclosed copy of our Initial Consultation Agreement, which we will ask you to sign at the beginning of the initial consultation meeting. In order for us to provide our personalized service, it is necessary for us to have a complete understanding of your personal and financial situation when tailoring an estate plan for you. Accordingly, I have enclosed a Confidential Estate Planning Questionnaire for you to complete to the best of your ability and
Transcript
OFFICE:
207 Chestnut Street Suite 150 Chaska, MN 55318 WEB:
Thank you for your interest in our Estate Planning Services. At JOHNSTON LAW GROUP PLLC, we assist individuals and families with all types of estate planning needs, from basic wills and revocable “living” trusts to more sophisticated planning techniques, such as irrevocable life insurance trusts, family partnerships, business succession planning, cabin succession planning, and charitable giving. Above all, we pride ourselves on providing personalized service to our clients, assisting them with all aspects of their estate planning. As such, we like to schedule a free one-hour initial consultation with you as soon as possible to discuss your estate planning needs. We encourage you to bring your other financial and personal advisors to this meeting, if you so desire.
Please note that this initial one-hour consultation creates no obligation
on your part: if at the end of the hour-long free consultation, you decide not to retain us for our estate planning services, you will not be charged for the meeting. However, if the initial consultation exceeds one-hour in length, we will charge you for the additional meeting time at rate of $50.00 per 15 minute increment (or portion thereof), payable at the conclusion of the meeting. For more information, please review the enclosed copy of our Initial Consultation Agreement, which we will ask you to sign at the beginning of the initial consultation meeting.
In order for us to provide our personalized service, it is necessary for us to have a complete understanding of your personal and financial situation when tailoring an estate plan for you. Accordingly, I have enclosed a Confidential Estate Planning Questionnaire for you to complete to the best of your ability and
JOHNSTON LAW GROUP PLLC Estate Planning Services Page 2 bring to our meeting. Please be assured that any information provided to us in the Questionnaire, at the initial consultation, or otherwise will remain strictly confidential (unless otherwise approved by you), whether or not you decide to retain our services. Prior to our meeting, you also should try to review all of the beneficiary designations on your life insurance plans and retirement accounts so that we can discuss them as they relate to your estate planning situation.
I look forward to working with you to achieve your estate planning goals. At your earliest convenience, please call our office to schedule your initial estate planning consultation.
Very truly yours, Thomas M. Johnston Attorney at Law
TMJ/ Enclosures rev. 3-2008
JOHNSTON LAW GROUP PLLC 207 Chestnut Street, Suite 150 Chaska, MN 55318 (952) 556-5200
Thomas Johnston
Text Box
JOHNSTON LAW GROUP PLLC 207 Chestnut Street, Suite 150 Chaska, MN 55318 (952) 556-5200
OFFICE:
207 Chestnut Street Suite 150 Chaska, MN 55318 WEB:
www.johnstonlawgroup.com
TELEPHONE:
(952) 556‐5200 (888) 706‐2244
FAX:
(888) 706‐2244
Page 1 of 2
Initial Consultation Agreement Prospective Client(s): Date: File No.: This Initial Consultation Agreement sets forth the terms and conditions of the initial consultation meeting between JOHNSTON LAW GROUP PLLC (“we” or “us”) and the undersigned prospective client(s) (“you”):
1. Purpose. The purpose of the initial consultation is for us (a) to learn about you and your particular legal needs based on the information you provide; (b) to answer your questions to the best of our ability; (c) to identify your options and, to the extent possible, analyze the costs and benefits of those alternatives; (d) to help you determine your course of action, if any; (e) to discuss our fees and terms of representation if an attorney-client relationship is to be established after the meeting; and (f) to determine the next steps in the process, as appropriate.
2. Confidentiality. All information and documents that you provide to us at the initial consultation shall remain strictly confidential, whether or not you decide to retain us to provide legal services, except as authorized by you or otherwise provided under the Minnesota Rules of Professional Conduct.
3. Reliance Limited. Because it may be impossible to fully assess a matter within the time frame allotted for the initial consultation or with the information or documents that you provide at the initial consultation, you should not rely upon any legal opinions provided by us during the initial consultation concerning any legal matter.
4. Limited Scope. No attorney-client relationship is intended to be established by the initial consultation. The initial consultation is a limited scope service provided by us to help you determine whether you may want to retain us to provide legal services. At the conclusion of the initial consultation, there is no obligation for you to retain us, nor do we have an obligation to provide services to you, unless mutually agreed.
5. Engagement Agreement Required. Following the initial consultation, if you agree to retain us, and if we agree to provide services to you, then we will prepare a separate, more detailed Engagement Agreement to be executed by both parties. The new Engagement Agreement will supersede this Initial Consultation Agreement and will set forth the terms and conditions of our representation of you, including our fees and the specific services to be performed by us.
6. Cost of Initial Consultation. The first 60 minutes of the initial consultation are provided to you free of charge. If the initial consultation lasts longer than 60 minutes, we will charge you for additional meeting time at a rate of $50.00 for each 15 minute increment (or portion thereof). Payment of these charges must be made at the conclusion of the initial consultation meeting. At our discretion, these charges for additional meeting time may be credited to your account and applied against other charges if an attorney-client relationship is established after the conclusion of the initial consultation meeting. Only one free 60 minute initial consultation will be provided to a prospective client. By signing this document below, I agree to the terms and conditions set forth above concerning my initial consultation meeting, and I understand that this meeting is limited in scope and will not establish an attorney-client relationship with JOHNSTON LAW GROUP PLLC.
Prospective Client(s):
OFFICE:
207 Chestnut Street Suite 150 Chaska, MN 55318 WEB:
www.johnstonlawgroup.com
TELEPHONE:
(952) 556‐5200 (888) 706‐2244
FAX:
(888) 706‐2244
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Confidential Estate Planning Questionnaire Client(s): Date: Attorney: File No.: The purpose of estate planning is to distribute your property at your death to those persons or organizations to which you wish it to go. Competent estate planning also involves minimizing taxes and expenses at the time of your death and thereafter. If your estate is properly planned, the law will assure the distribution of your property as you wish. There are a number of suitable methods for transferring property at death, however, of which a will is only one alternative. For this reason, detailed information is needed about all of your property. In formulating an estate plan, it is also important to know the identity of the persons or organizations that an individual wishes to benefit, as well as the strengths and weaknesses of those beneficiaries. As such, we ask you to provide us with information about your immediate family members and other relatives. Appropriate alternatives can then be developed which will take into account any future change in circumstances. We look forward to assisting you with your estate planning effort, and we thank you for contacting us for your estate planning needs.
Please answer the following questions as best as you can (please print). If you are unsure how you should respond, leave the question blank.
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CLIENT Full Name: a/k/a:
Usual Signature Form: U.S. Citizen: Yes No
Birthdate: Social Security Number:
Home Address:
Home Telephone: Home Fax:
Home E-mail:
Employer: Occupation:
Business Address:
Business Telephone: Business Fax:
Business E-mail:
Mobile Telephone:
SPOUSE Full Name: a/k/a:
Usual Signature Form: U.S. Citizen: Yes No
Birthdate: Social Security Number:
Employer: Occupation:
Business Address:
Business Telephone: Business Fax:
Business E-mail:
Mobile Telephone: Where should correspondence be sent?
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Have you or your spouse been married before? Yes No
If yes, are there any financial obligations from the prior marriage(s)? Yes No Have you entered into any pre-marital or post-marital agreement(s)? Yes No
If yes, please attach a copy of the agreement(s).
CHILDREN
Full Name of Each Child Home Address & Telephone Number Sex Birthdate Marital
Status Number of Children
Age of Children
Are any of these children not children of the present marriage? Yes No
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OTHER LIVING RELATIVES CLIENT:
Parents Age
Brothers & Sisters Age
SPOUSE:
Parents Age
Brothers & Sisters Age
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ASSET & LIABILITY INFORMATION
Please round all dollar amounts to the nearest $1,000. If more space is needed, please continue on the back or attach a separate sheet.
SCHEDULE 1: Cash, Bank Accounts, Certificates of Deposit, Etc.
Bank or Financial Institution Type of Account Owned By Account Balance
Total $
SCHEDULE 2: Marketable Stocks, Bonds, Brokerage Accounts, Etc.
Shares/Account Description Registered Owner(s) Current Market Value
Total $
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SCHEDULE 3: Homestead & Other Real Estate
Description of Property (Address Location) Owned By Mortgage Balance Current Market Value
Total $ SCHEDULE 4: Life Insurance
Policy Insured Policy Owner Beneficiary Face Value Cash Value Loans Outstanding
Total $ SCHEDULE 5: IRAs, Pension, Profit-Sharing, 401(k), & Other Retirement Accounts
Type of Account/Plan Owner Beneficiary Current Value or Death Benefit
Loans Outstanding
Total $
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SCHEDULE 6: Closely-Held Business Interests / Other Personal Assets
Creditor Name Secured With Date of Maturity Current Balance Owed
Total $
ANNUAL GROSS INCOME
Gross Income Client Spouse Joint
Salary
Bonuses/Commissions
Dividends/Interest
Other Income (List):
Total $
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SUMMARY NET WORTH STATEMENT By ownership and current estimated values (please round to the nearest $1,000).
Assets Client Spouse Joint
Cash (Schedule 1)
Marketable Securities (Schedule 2)
Homestead (Schedule 3)
Other Real Estate (Schedule 3)
Closely-Held Business Interests (Schedule 6)
Automobiles
Household Goods & Personal Effects
Face Value of Life Insurance on Client (Owned by Client) (Schedule 4)
Face Value of Life Insurance on Spouse (Owned by Spouse) (Schedule 4)
IRAs, Pension, Profit-Sharing, 401(k), Other Retirement Accounts (Schedule 5)
Other Personal Assets (Schedule 6)
TOTAL ASSETS:
LIABILITIES Client Spouse Joint
Real Estate Mortgages (Schedule 3)
Other Debts & Liabilities (Schedule 7)
TOTAL LIABILITIES:
CURRENT NET ASSETS (Assets less Liabilities)
TOTAL NET WORTH $
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MISCELLANEOUS INFORMATION
1. Do you or your spouse presently have wills? Client Spouse None
If yes, please attach a copy of the will(s). 2. Is it likely that your estate or your spouse’s estate will grow significantly in the
next five years due to inheritance, appreciation, or other reasons?
Yes No If yes, explain:
3. Do you or your spouse own any property jointly with any other person (other than your spouse)?
Yes No If yes, describe:
4. Do you or your spouse presently own any real estate or tangible personal property located outside the State of Minnesota?
Yes No If yes, where?
5. If married, have you or your spouse during your marriage ever acquired property (including personal property) while a resident of another state?
Yes No N/A If yes, in what state(s)?
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6. Have you or your spouse made gifts after 1981 to any person or entity in excess of $10,000 per year?
Yes No If yes, describe (and attach any previous Gift Tax Returns):
7. Are you or your spouse a beneficiary or trustee of any trust?
Yes No If yes, describe:
8. Have you or your spouse previously made any transfers to any trusts?
Yes No If yes, describe (and attach copy of the trust agreement(s)):
9. Does any member of your family have special needs, for example, because of poor health or a disability?
Yes No If yes, describe:
10. Is any member of your family receiving public assistance benefits, or has any family member received public assistance benefits in the past?
Yes No If yes, describe:
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11. Do you or your spouse wish to leave any specific gifts or bequests to certain individuals or charities?
Yes No If yes, describe:
12. Do you want trusts set up for your children and/or grandchildren?
Yes No N/A If yes, how long should the trusts continue? 13. Who should receive your estate(s) if no member of your immediate family (e.g.
your spouse or any of your descendants) is living?
14. Who should serve as Personal Representative(s) of your estate (i.e. the person(s)
responsible for carrying out the terms of your will)?
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15. Who should serve as trustee(s) of any trusts established by you (i.e. the person(s), bank or trust company responsible for administering the trusts)?
16. Who should act as guardians(s) for your minor children? N/A
OTHER ADVISORS
(Please provide name, company, and telephone number)
ACCOUNTANT/TAX PREPARER: INVESTMENT ADVISOR: LIFE INSURANCE AGENT: OTHER:
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HOW DID YOU LEARN OF OUR FIRM? (Please check all that apply)
Recommended by:
May we contact this person to thank them for the referral? Yes No
Yellow Pages (please specify):
Church Bulletin (please specify):
Internet Search or Web Page (www.johnstonlawgroup.com)
Attended Seminar (please specify):
Other:
Please bring this completed Estate Planning Questionnaire (and any requested documents) to your estate planning conference.
Probate and PlanningA Guide to Planning for the Future
From the Office of
Minnesota Attorney GeneralLori Swanson
www.ag.state.mn.us
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Probate and Planning: A Guide to Planning for the Future is written andpublished by the Minnesota Attorney General’s Office. This brochure waspublished in January 2007 in St. Paul, Minnesota. This handbook is availablein alternate formats upon request.
The Attorney General’s Office answers questions about consumer is-sues. If you have a consumer question or complaint, contact the Office inwriting or by phone:
Minnesota Attorney General’s Office445 Minnesota Street, Suite 1400St. Paul, MN 55101(651) 296-3353 or 1-800-657-3787TTY: (651) 297-7206 or 1-800-366-4812(TTY numbers are for callers using teletypewriter devices.)
The Attorney General’s Office is an equal opportunity employer which valuesdiversity.
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INTRODUCTION ....................................................................................................... 5WILLS .................................................................................................................. 6What is a will? ..................................................................................................... 6Does everyone need a will? ................................................................................. 6What rules apply to wills? ................................................................................... 6What is a self-proved will? .................................................................................. 6What is in a will? ................................................................................................. 7Can I leave my spouse or my children out of my will? ....................................... 7What is a personal representative? ...................................................................... 7What is a guardian? ............................................................................................. 8How do I prepare a will? ..................................................................................... 8How do I change or update a will? ..................................................................... 8Where do I keep a will? ...................................................................................... 9PROBATE ............................................................................................................. 10What is probate? ............................................................................................... 10When is probate necessary? ............................................................................. 10What items are not subject to probate? ............................................................ 10How do I probate an estate? ..............................................................................11How will the estate be distributed to heirs? ....................................................... 12What taxes must be paid? ................................................................................. 12LIVING TRUSTS ................................................................................................... 13What is a trust? ................................................................................................. 13What are the basic types of trusts? ................................................................... 13What are the pros and cons of a revocable living trust? ................................... 14How do I establish a trust? ............................................................................... 15What is the role of the trustee?.......................................................................... 15CONSERVATORSHIP/GUARDIANSHIP ........................................................................ 17What is guardianship and conservatorship?...................................................... 17What is the difference between a conservatorship and a guardianship? ........... 17What are the duties of a guardian? .................................................................... 17What are the duties of a conservator? ............................................................... 18Does a guardian or conservator have absolute power and authority? ............... 18
Table of ContentsTable of Contents
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Why might I need a conservator or guardian? .................................................. 18How do I establish a conservatorship? ............................................................. 19What are the advantages of a conservatorship? ................................................ 19What are the disadvantages of a conservatorship? ........................................... 20What are the alternatives to a conservatorship or guardianship? ...................... 20POWER OF ATTORNEY ......................................................................................... 22What is a power of attorney? ............................................................................ 22What is a durable power of attorney? ............................................................... 22When should I use a power of attorney? .......................................................... 22How much power does a power of attorney have?........................................ 22How do I create a power of attorney? .............................................................. 23What happens if I don't have a durable power of attorney for finances? ......... 23When does a power of attorney end? ............................................................... 24HEALTH CARE DIRECTIVE ..................................................................................... 25What is a health care directive? ......................................................................... 25Why might I need a health care directive? ......................................................... 25How do I prepare a health care directive? ......................................................... 25What should I include in my health care directive? ........................................... 25What are the limits on my health care directive? ............................................... 26How do I change my health care directive? ...................................................... 26PLANNING A FUNERAL.......................................................................................... 27How should I plan my funeral? ......................................................................... 27How should I pay for my funeral? .................................................................... 27What safeguards exist for consumers who pay in advance? ............................ 27SAMPLE FORMS ................................................................................................... 29Health Care Directive Form .............................................................................. 30Power of Attorney Short Form ......................................................................... 36Revocation of Power of Attorney Form ........................................................... 39Table of Minnesota Heirship ............................................................................. 40GLOSSARY OF TERMS ......................................................................................... 41REFERRAL GUIDE ................................................................................................. 43
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IntroductionThe process of planning ahead for the end of life is somethingthat many want to avoid. Although planning for such a timemay not be comfortable, it is an important step to help thosewho will care for you and your affairs. In fact, some peoplefind it reassuring to know that they have prepared a will todirect how their property should be allocated, or a health caredirective to tell their family and caregivers about the medicaltreatment they want.
These issues and more are discussed in this handbook, Pro-bate and Planning: A Guide to Planning for the Future.The book addresses wills and the probate process. Next, itdescribes living trusts, conservatorships, and powers of attor-ney. Finally, it addresses health care directives and planning afuneral.
This publication contains some legal or technical words thatmay need further explanation. You may want to scan theGlossary of Terms located on page 41 before reading ahead.
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Wills
What is a will?
A will is a legal document that allows youto transfer your property at your death.
A will is a simple way to ensure that yourmoney, property and personal belongingswill be distributed as you wish after yourdeath. A will also allows you to have fulluse of your property while you are alive.
Does everyone need a will?
The law does not require that you have awill. However, a will is a useful tool thatprovides you with the ability to control howyour estate will be divided.
If you die without a will, Minnesota’s inher-itance laws will control how your estate willbe divided. Your property will go to yourclosest relatives. If you have a spouse andchildren, the property will go to them by aset formula. If not, the property will de-scend in the following order: grandchildren,parents, brothers and sisters, or more dis-tant relatives if there are no closer ones. Atable of Minnesota Heirship is includedamong the sample forms at the back of thisbooklet.
You may not need a will if you have madeprovisions so that your assets will pass with-out one, for example, by establishing trusts,life insurance policies with named benefi-ciaries, or joint property interests such asreal estate or bank accounts.
A will is necessary if you want to leave prop-erty to a friend or a charity, to give certainitems to certain people, or to leave some-one out who would otherwise inherit fromyou. Also, you may wish to appoint a spe-cific person to handle your estate. Thus,often it is best to write a will so your inten-tions can be met.
What rules apply to wills?
In Minnesota, the following rules apply towills:
• You must be at least 18 years old and ofsound mind to make a will;
• The will must be in writing;• The will must be signed by you, or by
another person at your direction and inyour presence; including the testator’sconservator pursuant to a court order;
• The will must be witnessed by at leasttwo people, both of whom must alsosign the will; and
• You must intend for the document tooperate as a will.
What is a self-proved will?
A will is self-proved when you and witnessesacknowledge in affidavits that you signedand executed the will voluntarily, within thepresence of at least two witnesses, that youare over 18 years old, not under undue in-fluence, and of sound mind. A will may bemade self-proved at the time it is executed
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or at any time thereafter. You may want toconsider this procedure as it helps estab-lish that your will was properly executed,should it be contested in court.
What is in a will?
Generally, the following basic elements areincluded in a will:
• Your name and place of residence;• A description of any assets you wish to
give to a specific person;• Names of spouse, children, and other
beneficiaries such as charities orfriends;
• Alternative beneficiaries, in the event abeneficiary dies before you do;
• Establishment of trusts, if desired;• Cancellation of debts owed to you, if
desired;• Name of a trustee for any trusts created;• Name of a personal representative to
manage the estate;• Name of a guardian for minor children;• Name of an alternative guardian, in the
event your first choice is unable orunwilling to act;
• Your signature; and• Witnesses’ signatures.
Your will should clearly state who will getyour property upon your death. You shouldalso indicate in an itemized and organizedmanner how much each person will receive.You should be sure to name a guardian foryour minor children and name a personalrepresentative for your will.
Can I leave my spouse or my childrenout of my will?
In Minnesota, your spouse may claim up toone half of the estate, even if he or she isleft out of the will. The amount of moneyyour spouse would get depends on howlong your spouse and you were married.Your spouse has an option of whether ornot to take this amount. Unlike a spouse,you may disinherit a child in your will.
What is a personal representative?
A personal representative (also known asan executor or administrator) is the personwho oversees payment of your debts anddistribution of your assets according to yourwill. A personal representative is consid-ered a fiduciary. This means that he or shemust observe a high standard of care whendealing with the estate. You should identifya personal representative by name in yourwill. Most people choose their spouse, anadult child, a relative, a friend, a trust com-pany or an attorney to fulfill this duty, butanyone can be named personal representa-tive in a will. Since your personal represen-tative will handle your assets, you shouldalways pick someone you trust.
You may also appoint more than one per-sonal representative. When there is morethan one personal representative, all repre-sentatives must agree on any decision re-garding the estate unless the will providesotherwise.
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If no personal representative is named in awill, a judge will appoint one for you to over-see the distribution of your assets.
Responsibilities usually undertaken by apersonal representative include:
• Filing your will, an inventory of your as-sets, and other documents with thecourt;
• Paying valid creditors;• Paying taxes;• Notifying Social Security and other
agencies and companies of the death;• Canceling credit cards, magazine sub-
scriptions, and similar consumer items;and
• Distributing assets according to yourwill.
What is a guardian?
In most cases, a surviving parent assumesthe role of sole guardian of your minor chil-dren. However, if neither spouse survives,or if neither is willing and able to act, it isvery important to name a guardian in yourwill. The guardian you choose should beover 18 and willing to assume the responsi-bility. Talk to the potential guardian aboutwhat you are asking before naming that per-son in your will. You can name a couple asco-guardians, but that may not be advis-able. It is always possible the guardiansmay choose to separate at some later date;if so, a custody battle could ensue. If youdo not name a guardian to care for yourchildren, a judge will appoint one.
How do I prepare a will?
You should outline your objectives, inven-tory your assets, estimate your outstandingdebts and prepare a list of family membersand other beneficiaries. You should thenuse this information to consider how youwant to distribute your assets. Some ques-tions include the following:
• Is it important to pass my property tomy heirs in the most tax-efficient man-ner?
• Should I establish a trust to provide formy spouse or other beneficiaries?
• How much money will my grandchildneed for college?
• Do I need to provide for a child whohas a disability?
Assets that you do not specifically addressin your will may fall into a “catch-all” clausein your will. This catch-all provision is of-ten called a “residuary clause” since it gen-erally states, “I give the residue of my es-tate to …” Without this clause, the itemsyou do not specifically mention will be dis-tributed in accordance with state law.
When it comes to actually writing your will,you may find it helpful to contact an attor-ney. In the Referral Guide section of thisbook on page 43, phone numbers are avail-able for various attorney referral and legalaid services.
How do I change or update a will?
You may want to update or change yourwill if:• Your marital status changes;
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• A child or grandchild is born;• There is a death in the family;• You move to a new state;• The value and kind of property you own
changes substantially;• Your personal representative moves
away or dies; or• Tax laws change. (You generally need
to worry about tax laws only if your es-tate exceeds $2,000,000.)
Wills can be changed either by writing andexecuting a new one or by adding a “codi-cil,” which is an amendment to a will. Thecodicil must be written, signed and wit-nessed the same way as the will, and shouldbe kept with the original will.
Do not try to change your will by simplycrossing out language or writing in new pro-visions. Crossing out language raises thequestion of whether you intended to revokeyour whole will or just a part of it. Writingnew provisions will be ineffective unless theprovisions are signed by you and two wit-nesses.
The only part of your will that can bechanged without being rewritten and ex-ecuted is a separate personal property dis-tribution list. If your will specifically statesthat you are distributing personal propertyby a separate document, you may simplywrite out a statement describing how youwant to distribute your personal property.The statement can be written after the willis signed, and it can be changed withoutrevising the will itself. If you use such astatement, always be sure to date and signit. The last statement controls the disposi-
tion of the property, and all statements maybe ineffective if their order cannot be deter-mined.
A will is effective until you change, revokeor cancel it, so it is a good idea to periodi-cally review your will.
Where do I keep a will?
Your will should be kept in a safe place.The original will should be placed where itcan easily be found after your death. Makesure your personal representative, a closefriend or relative knows where to find it andcan access it, particularly if you are consid-ering a safe deposit box.
In Minnesota, the probate court or courtadministrator’s office will accept wills forsafekeeping at no charge or for a nominalfee. You have the right to get your will backat any time. If an attorney prepares yourwill, he or she may be willing to hold it forsafekeeping. If you do this, be sure to tellyour family that the attorney has it.
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Probate
What is probate?
Probate is the legal process of settling yourestate in court after you die. Your propertyis gathered and inventoried, your debts arepaid, and everything left over is dividedamong your heirs. Your personal represen-tative is responsible for “probating” yourwill. If you have no will or did not name apersonal representative, the court will ap-point one for you.
Probating a will begins by filing an applica-tion with the probate court. Probate endswhen all debts and taxes are paid and allassets are distributed. If there is disagree-ment over your will, a probate judge willresolve the differences.
When is probate necessary?
Probate laws in Minnesota apply to theestates of people who were residents ofMinnesota at the time of their death. Pro-bate also applies to other states’ residentswho own real property in Minnesota.
Having a will does not avoid probate. Theneed for probate depends on what prop-erty you own and whether you own it aloneor with others.
Real estate. Unless real estate is ownedin joint tenancy with right of survivorshipor placed into a trust, it must be probated.Joint tenancy means that the property is
owned by two or more people who have anundivided interest in the property, and thatinterest continues in the survivor after otherowners die. If you are a resident ofMinnesota and own real estate in anotherstate at the time of your death, the probatelaws of that state will apply to that real es-tate. In other words, real estate is probatedin the state where it is located.
Personal property. If your estate is worthless than $20,000, your heirs may be ableto collect the property without going to courtby using an Affidavit for Collection ofPersonal Property. Your personal repre-sentative should notify all of the heirs of theproperty that they can collect. Heirs maynot take your personal property until 30days after your death. If your personal prop-erty exceeds $20,000 or you own real es-tate in your name alone, your estate mustbe probated.
What items are not subject to probate?
Some kinds of property and assets do notneed to be probated. These include prop-erty owned as joint tenants, jointly held bankaccounts, payable-on-death accounts, lifeinsurance proceeds to a specific beneficiary,and pension benefits with a designated ben-eficiary in the event you die.
Joint tenancy property. As discussedpreviously, holding title to property in jointtenancy means that you and another person
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each have an undivided interest in the prop-erty and a right to own it after the otherperson dies. In the case of real property,this fact would be stated in your title docu-ments. When a co-owner dies, the surviv-ing property owner must file a certified copyof the death certificate of the deceased prop-erty owner and an affidavit of survivorshipwith the county recorder or registrar.
Jointly held bank accounts. As in jointtenancy of real property, you and one ormore people may be listed as account hold-ers of the same financial account. If one ofthe joint account holders dies, the other jointaccount holders own the money in theshared bank account.
Payable-On-Death accounts (PODs). Apayable-on-death account is an individually-owned account in which you choose some-one else to receive the funds in your ac-count upon your death. The beneficiary, orperson getting the money upon your death,has no right to these funds until your death.You may set up a POD by contacting yourfinancial institution. You may change thebeneficiary by completing a new signaturecard at any time.
Life insurance proceeds. Your life insur-ance policy can indicate a specific person,called a “beneficiary,” who will receive yourinsurance proceeds when you die. Call yourinsurance agent or company if you are in-terested in naming a specific person or per-sons to receive your life insurance money.
How do I probate an estate?
Your personal representative starts a pro-bate proceeding by filing an application orpetition with the probate court in the countywhere you lived at the time of your death.Probate proceedings in Minnesota may beeither formal or informal, and generally mustbe initiated within three years after thedecedent’s death. The services of an attor-ney may be needed in order to correctlyprobate an estate.
Informal. The informal probate processis initiated by filing an application with theprobate court. In some counties, you mustfile the application in person. If the pro-bate registrar determines the application iscomplete, the registrar will issue a statementof probate and appoint a personal repre-sentative. In the informal process, the per-sonal representative may pay debts and in-heritances and may otherwise administer theestate without the court’s supervision.
Applications for informal probate shouldinclude the following:
• The applicant’s interest in the proceed-ing (i.e. spouse, child, attorney, personalrepresentative, etc.);
• The decedent’s name, dates of birth anddeath, social security number, and thecounty of residence at the time of death;
• The names and addresses of thedecedent’s spouse, children, and anyothers named in the will if there is one,and if a person is a minor, listing thatperson’s age;
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• An organized, itemized list of thedecedent’s probate and non-probate as-sets; and
• The name and address of the person whois, or should be, named personal repre-sentative.
If there is a will, the following also must beincluded in the application:
• A statement that the original will is in thecourt’s possession, accompanies theapplication, or an authenticated copy ofa will probated in another jurisdiction isattached to the application;
• A statement that the will has been validlyexecuted;
• A statement that the applicant is not,upon investigation, aware that the willhas been revoked; and
• A statement that the time for beginninginformal probate proceedings has notexpired, which is generally three yearsafter the decedent’s death.
The probate registrar has discretion to ei-ther accept or reject the application. It isnot a final determination if the registrar re-jects the application and does not preventthe will from undergoing formal probateproceedings.
Formal. Filing a petition with the court,starts formal proceedings. The petitionerthen must appear before a court at a hear-ing. Because most people lack experiencein formal probate proceedings, it is best toconsult an attorney if an informal probateproceeding cannot resolve the estate. If thecourt finds that the petition is complete, the
court will issue an order for probate andappointment of the personal representative.
How will the estate be distributed toheirs?
If there is a will, the personal representativeshould distribute the estate property accord-ing to the will. If there is no will, the estateproperty will be distributed according tostate intestate succession laws. A table ofMinnesota’s Heirship is located in this book-let on page 40.
The law generally provides that, without awill, your estate will pass to your spouse, ifstill alive, but in situations where eitherspouse has children from other marriages,the share of the spouse may be less thanthe entire estate. If your spouse is not alive,your estate will pass to your children inequal shares. You should consult an attor-ney to determine exactly how your estatewill be divided if you do not have a will.
Sometimes, relatives cannot be located ortraced. In this case, assets of the estatethat cannot be distributed are deposited withthe county treasurer until claimed.
What taxes must be paid?
Federal law provides that you can transferup to $2,000,000 to someone other than aspouse before incurring estate tax. If youare married, you can transfer any amountof property to a spouse during your life-time or after your death without incurringfederal estate tax.
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Living Trusts
What is a trust?
A trust manages the distribution of your as-sets. A trust is created by the transfer ofproperty by the owner (sometimes calledthe “grantor,” “donor,” or “settlor”) to an-other person (the trustee). A trustee can bea professional with financial knowledge, arelative or friend, or a professional trustcompany. The trustee holds the title to theproperty and manages the property for thebenefit of the beneficiaries who may be aspecific person, a group of people, or anorganization.
What are the basic types of trusts?
There are two basic types of trusts. The“living” or “intervivos” trust is created dur-ing the lifetime of the grantor when all orpart of the grantor’s property is transferredinto the trust. A “testamentary” or “after-death trust” is created by the settlor’s willwhich transfers property to the trust.
Testamentary or after-death trusts. Anafter-death trust will be created by a willafter a person’s death. The assets to fundthese trusts must usually go through theprobate process, and may be supervisedby the court even after the estate is closed.An example of an after-death trust wouldbe one created by a parent leaving land to atrust to benefit a minor child in his or herwill. The will establishes the trust to whichthe land is transferred, to be administered
by a trustee until the child reaches a statedage, at which point title to the land is trans-ferred to the child outright.
Living trusts. A living trust is a trust madewhile the person establishing the trust is stillalive. In this case, a parent could establisha trust for a child during his or her lifetime,designating himself or herself as trustee andthe child as beneficiary. As the beneficiary,the child does not own the property, butinstead receives income derived from it.
Living trusts can be revocable or irrevo-cable. The most popular type of trust isthe revocable living trust, which allows theindividual to make changes to the trust dur-ing his or her lifetime. A revocable trustusually directs the trustee to pay all incometo the settlor for life and to pay the trustassets to named persons after the settlor’sdeath. Revocable living trusts avoid theoften lengthy probate process but, by them-selves, don’t provide shelter for assets fromfederal or state taxes. These trusts are of-ten considered tax-neutral as the tax conse-quences for the grantor are usually the samewhether or not the property is placed in atrust.
An irrevocable living trust is usually set upto reduce estate or income taxes. For taxpurposes, the trust becomes a separate en-tity; the assets cannot be removed, nor canchanges be made by the settlor. In most
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cases, the settlor cannot be sole trustee ofan irrevocable trust without losing the in-tended tax benefits.
Specific-Use trusts. Trusts can be tailoredto your goals. Here are a few special usesfor trusts:
• A charitable trust is used to make dona-tions and realize tax savings for an es-tate. Typically, you transfer property,such as art or real estate to a trust. Thetrust holds the asset until it is transferredto a charity, usually after your death. Thedonor may continue to enjoy the use ofthe property, and also realize estate taxsavings by donating it to a charity.
• A bypass trust allows a married couple,in certain cases, to shelter more of theirestate from estate taxes. The first spouseto die can leave assets in a trust whichprovide income to the surviving spouse.Upon the death of the second spouse,the assets in the trust belong to the chil-dren or other beneficiaries, without be-ing taxed at the second spouse’s death.
• A spendthrift trust can be a good idea ifthe beneficiary is too young or does nothave the mental capacity to handlemoney. The trust can be established sothat the beneficiary receives smallamounts of money at specified intervals.It is designed to prevent the young per-son from squandering money or losingthe principal in a bad investment. Fur-ther, creditors will not be able to take abeneficiary’s income from this trust.
• A life insurance trust is often used togive an estate liquidity. In this case, thetrustee of the trust is named as the ben-eficiary of the life insurance policy. The
trust then receives the life insurance pro-ceeds upon the death of the insured.
What are the pros and cons of arevocable living trust?
First, a revocable living trust enables youto have a trustee with financial expertisemanage your assets during your lifetime.The trustee with financial experience mightcharge a fee of around 1% of the totalamount of the property in the trust. Thisarrangement is particularly useful if you arehaving difficulty managing your financialaffairs. A trustee could invest your assets,arrange for payment of bills and debts, andfile your tax returns. If you wish, you canestablish yourself as a co-trustee.
Second, a revocable living trust can pro-tect your privacy regarding the distributionof your assets. With a will, the probatelaws require that an inventory of the estate’sassets be filed with the court. The will andthe inventory are public information. Witha revocable living trust, generally only thebeneficiaries of the trust will be informedof the nature and the value of the assets.The important thing is to make sure that allof your property is in the trust.
Third, by placing your assets in a revocableliving trust instead of a will, you can avoidthe time delays that are typical of probatinga will. Trust assets, in most situations, canbe distributed to beneficiaries almost im-mediately after the death of the grantor.
Fourth, if you own land in another state, arevocable living trust might help you avoida probate proceeding in the other state for
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that property. For example, if you have acabin in Wisconsin and place it in a revo-cable living trust, you may be able to avoida Wisconsin probate proceeding.
There are some potential drawbacks to arevocable living trust. First, transferringproperty into a revocable living trust maymake you ineligible for Medical Assistance.Second, when the grantor is also the trustee,the grantor has a fiduciary obligation to thebeneficiaries for both present and future in-come. A fiduciary duty is a high standardthat requires the trustee to follow the termsof the trust and the law in good faith andwith loyalty, confidence and candor to thebeneficiaries.
How do I establish a trust?
Establishing a trust requires a document thatspecifies your wishes, lists beneficiaries,names a trustee or trustees to manage theassets and describes what the trustee ortrustees may do. For a living trust, you canname yourself as trustee but, if you do, youshould also name a successor trustee to takeover if you should become disabled or die.Once the document is completed, you musttransfer the assets to the trust. Keep in mindthat, in the case of certain assets, such asreal estate, you may incur fees and transfertaxes.
If the living trust contains all of your prop-erty, a will may be unnecessary and youcan avoid probate. If the trust contains onlypart of your property, you need a will forthe rest of it. If you want your property togo into the trust after your death, your willshould include a “pour-over” provision to
put the remaining property into the trustupon your death. Also, a will can be usedto distribute personal belongings, identifyguardians for your children, and provide fora personal representative to handle any un-finished business. If assets are not put intoa trust and are disposed of by will, they willhave to be probated which negates the ad-vantage of the living trust.
Prepared forms or kits used to establish liv-ing trusts are currently marketed throughmagazines, brochures and door-to-doorsalespeople. Review these forms carefully;they may be too generic to suit you andyour situation.
You may want to consider contacting anattorney if you would like to set up a trust.An attorney can help you evaluate theneed and uses of a trust in light of youroverall estate planning objectives. Watchout for investment scams advocating un-realistic benefits of a trust. Also bewareof workshops conducted by people withthe intent to sell you something ratherthan to provide objective information.If you want to set up a trust, be sure totalk with people who are credible andtrustworthy.
What is the role of the trustee?The trustee is considered a fiduciary andtherefore must adhere to a high standard ofcare with respect to the trust. Included inthis standard is the duty to protect trustproperty, to manage trust investments pru-dently, to refrain from engaging in self-deal-ing or receive improper benefits from thetrust, and to not mingle trust assets with thetrustee’s own assets. The trustee has a duty
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to manage the trust’s assets in the best in-terests of the beneficiary or beneficiaries.This might include managing rental proper-ties, investing funds, or paying income tothe beneficiary.
Trusts differ in how a trustee can distributetrust income. A simple or mandatory trustrequires the trustee to distribute income tothe beneficiary. A complex or discretion-ary trust may afford the trustee discretionover the principal and income to be distrib-uted. The requirements imposed on thetrustee should be specified in the trust.
If you want to name someone as a trustee,talk with that individual or entity about thetrust. Be sure the person not only agrees toserve as trustee, but can comply with theterms of the trust. Because the fiduciarystandard imposes such a high standard ofduty and corresponding potential liability,the trustee cannot be forced into becominga trustee just because he or she is named ina trust document or will. If your desig-nated trustee is unable or unwilling to per-form, the court will appoint a trustee foryou, unless a successor trustee, such as acorporate trustee, is designated.
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What is guardianship andconservatorship?
Guardianship and conservatorship typicallyresult from court proceedings in which thecourt appoints someone (a “guardian” or“conservator”) to manage another person’sfinancial affairs or personal care decisions.Generally those proceedings are permittedonly when a person becomes so incapaci-tated or impaired that he or she is unable tomake financial or personal decisions, andhas no other viable option for delegatingthese duties to another (e.g., through a du-rable power of attorney, or living trust orsome other means). Using these standards,for instance, guardianships orconservatorships might be established forpeople who are in a coma, suffering fromadvanced stages of Alzheimer’s disease, orhave other serious injuries or illnesses.
Under Minnesota law, guardianships andconservatorships are used to appoint a per-son when an individual is unable to makepersonal decisions or is unable to meet hisor her financial needs, even with appropri-ate technological assistance. The court or-ders the appointment of a person (a con-servator or guardian) to act as a decisionmaker for another person (the protectedperson or ward). A court must base thisdecision on clear and convincing evidencethat the protected person or ward has beenfound to be unable to make necessary deci-sions on his or her own behalf and the court
Conservatorship/Guardianship
makes a finding of incapacity or impairment.Once a court makes a finding of incapacityor impairment, the person no longer has theright to manage his or her affairs until provencapable.
What is the difference between aconservatorship and a guardianship?
A conservator is appointed to make finan-cial decisions for a protected person. Theconservator typically has the power to col-lect all the conservated assets, pay bills,make investments and perform other finan-cial functions, as well as engaging in estateplanning, including the right to amend or re-voke the protected person’s will. However,the conservator must seek court approvalfor transactions such as the purchase or saleof real property, gifting of assets or engag-ing in estate planning for the protected per-son.
A guardian is appointed to perform dutiesrelated to personal care, custody and con-trol. The guardian has the authority to makedecisions such as where the ward will liveand what medical treatment they will receive.
What are the duties of a guardian?
Many duties are required of guardians. Theguardian has the duty to assure that provi-sions have been made for the ward’s careand comfort, including food, health care andsocial requirements. Whenever possible, the
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guardian should meet these needs throughgovernmental benefits or services for whichthe ward is entitled, rather than from theward’s estate.
The guardian also shall take reasonable careof the ward’s clothing, furniture and otherpersonal effects. The guardian must file anotice of intent to dispose prior to the dis-position or sale of the ward’s personal ef-fects. The guardian must also know thereligious faith of the ward.
The guardian must file with the court a re-port of the ward's personal well being, atleast annually or whenever ordered by thecourt. The report must contain the currentmental, physical and social condition of theward; the living arrangements for all ad-dresses of the ward during the past years;the medical, educational, vocational andother services provided to the ward; and arecommendation as to the need for contin-ued guardianship.
What are the duties of a conservator?
Many duties are required of conservators.Within 60 days after being appointed, aconservator must inventory the protectedperson’s estate, noting the fair market valueof any real estate, furniture, clothing, mort-gages, bonds, notes or debts, and any otherpersonal property. Thereafter, the conser-vator must file an annual accounting withthe court showing in detail all property re-ceived and disbursed, and listing all prop-erty on hand. The conservator must payfor the support, maintenance and educationof a protected person, using government
benefits when available, paying the protectedperson’s debts, and managing the protectedperson’s estate. Often the conservator mustalso post a bond — a kind of insurancepolicy that pays if the conservator steals ormisuses property. The conservator may alsohave to receive court approval for certaintransactions, such as selling real estate ormaking slightly risky investments. Aconservator’s duties terminate at death orwhen capacity is restored.
Does a guardian or conservator haveabsolute power and authority?
The law allows the court to grant the guard-ian or conservator limited power to exer-cise authority over the ward or protectedperson. A guardian or conservator may onlyuse their authority as necessary to providecare and services for the ward or protectedperson. The court should ensure that deci-sions of a guardian or conservator will notbe overly restrictive of the ward’s or pro-tected person’s rights.
Why might I need a conservator orguardian?
If you have other informal arrangements withrelatives or formal planning arrangements,such as a durable power of attorney, youmay not need to do conservatorship orguardianship planning. However, if it is likelythat someone would challenge your plan-ning arrangements (for example, if theremight be disagreements within the family);you may want to consider using conserva-torship or guardianship planning as a“backup” to your other planning arrange-
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ments. Remember, anyone can petition tobe a conservator or guardian for an inca-pacitated or impaired person, and a conser-vator or guardian can revoke or terminateprior planning arrangements. By choosinga person you would want to be your con-servator or guardian, you protect yourselfagainst the appointment of someone youwould not want to be in this position.
How do I establish a conservatorship?
“Conservatorship planning” (also called“nomination of conservator”) involves awritten document, like a will, in which youname the person you want for your conser-vator. You can also include instructions onhow you want your financial matters handledby your conservator. For example, the con-servator could be instructed to manage yourproperty, and be informed about yourwishes regarding estate planning. Then, ifyou should become impaired and need aconservator, the court must name the per-son you chose and order that your instruc-tions be followed, unless the court finds thatthis would not be in your best interests. Beaware that the person you choose is not re-quired to serve as your conservator — sochoose a reliable person and discuss yourplan with the person in advance to makesure he or she agrees with it. You shouldconsult an attorney for conservatorship plan-ning. Any person may petition the court forthe appointment of a conservator of an in-dividual who is unable to manage propertyand business affairs because of an impair-ment in the ability to make decisions. Oncea petition is filed with the court, a court in-vestigator may be appointed to interview the
proposed protected person. The investiga-tor reports back to the court with an opin-ion on whether or not the appointment of aconservator is justified. The petition is setfor hearing and the protected person mustappear in court unless medically unable todo so or unless excused by the court forgood cause. The judge determines, basedon the petition, the investigator’s report, andany evidence taken during the hearing,whether or not the conservatorship is re-quired and what types of special powersmay be granted to the conservator. Theproposed protected person has a right tohave an attorney represent his or her inter-ests in conservatorship proceedings.
What are the advantages of aconservatorship?
Conservatorships are subject to court su-pervision which provides a powerful safe-guard for an impaired adult’s property. Be-cause the conservator is required to file aninventory of the protected person’s prop-erty, and provide accountings and other re-ports to the court, a conservatorship offersa higher degree of protection to the pro-tected person than other managementmechanisms. A conservatorship also allowsfor the management of an impaired person’sfinancial affairs when he or she does nothave an alternative mechanism in place todo so. Another advantage to a conserva-torship proceeding is that it provides amethod to assist an impaired individual whomay be unwilling to accept such assistance.
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What are the disadvantages of aconservatorship?
Conservatorships are time-consuming andexpensive; they often require court hearingsand the ongoing assistance of a lawyer. Thepaperwork can also be a hassle because theconservator must keep detailed records andfile court papers on a regular basis.
The conservatorship can also be a cumber-some method of managing a person’s fi-nancial affairs, as the conservator must re-turn to court for approval of certain trans-actions, such as the sale of real property,borrowing money, setting up a trust, etc.These formal court hearings require addi-tional attorney fees and can create delays incompleting these transactions.
In addition, as noted above, a conservatormust usually post a bond. The bond pre-miums are paid by the protected person’sestate. Bonds are usually required, but mayprove to be an unnecessary expense if theconservator is competent and trustworthy.
Another disadvantage is that occasionally aconservator will mismanage a protectedperson’s assets. Common abuses rangefrom reckless handling of the protectedperson’s assets to outright theft. Althougheach state has rules and procedures designedto prevent mishandling of assets, few havethe resources to keep an eye on conserva-tors and follow through if they spot trouble.Many cases of incompetence or abuse gounnoticed.
Finally, a conservatorship can be emotion-ally trying for the protected person. All courtproceedings and documents are publicrecords, which can be embarrassing forsomeone who values independence and pri-vacy.
What are the alternatives to aconservatorship or guardianship?
Revocable living trust. Through the es-tablishment of a revocable living trust theindividual can appoint a trustee to managehis or her financial affairs and thus can avoidthe need for an appointment of a conserva-tor of the estate. A person must be compe-tent to establish a living trust.
Durable power of attorney for assetmanagement. A durable power of attor-ney is a document in which the individualcan delegate to an agent the power to makefinancial transactions on his behalf if he isunable to do so himself. However, the indi-vidual must be competent to execute a du-rable power of attorney and the agent act-ing under the durable power of attorney isnot subject to court review of his or heractions.
Health care directive. An individual cannominate an agent to make health care deci-sions on his behalf in a health care directive.These health care decisions can include thedecision to withdraw or continue life sup-port systems. The individual can also givespecific instructions as to health care in thedirective. As with a living trust and durablepower of attorney for asset management, a
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person must be competent to execute ahealth care directive.
Joint tenancy property. While the jointtenant may make decisions regarding theproperty that is held in joint tenancy, thereare significant risks that make this form ofownership a poor choice for the purposesof asset management. In particular, in a jointbank account a joint tenancy allows eitherjoint tenant to access the funds and thusone joint tenant can withdraw all the jointtenancy funds. Further, there can be ad-verse tax and estate planning consequencesas a result of creating a joint tenancy.
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Power of AttorneyWhat is a power of attorney?
A power of attorney is a document autho-rizing someone to act on your behalf. Youdetermine how much power the person willhave over your affairs. Your power of at-torney may be a general or limited power ofattorney. A general power of attorney au-thorizes your agent to conduct your entirebusiness and affairs. A limited or specialpower of attorney authorizes your agent toconduct specified business, perform speci-fied acts, or make certain decisions on yourbehalf.
In any power of attorney, you are consid-ered to be the “principal” and the person towhom you assign the power is your “agent”or “attorney-in-fact.” Your attorney-in-factdoes not have to be a lawyer, but it shouldbe someone you trust a great deal.
What is a durable power of attorney?
When a power of attorney is considered“durable,” it remains valid even if you be-come incompetent or incapacitated. Anordinary power of attorney expires if a per-son becomes unable to make his or her owndecisions. Durable powers of attorney canbe prepared either to take effect immedi-ately or to go into effect only if and whenyou become unable to make decisions foryourself (a “springing durable power of at-torney”).
The power of attorney form should indi-cate what kind of power of attorney youwant. You may want to consult an attorneyregarding the type of power of attorney youwant.
When should I use a power of attorney?
You may want to use a power of attorney ifyou are unable or unwilling to handle yourfinancial affairs yourself. You may also usea power of attorney to allow another indi-vidual to take care of your responsibilitiesat the time you become incapacitated. Hav-ing a power of attorney does not restrictyou from doing these things on your own,but instead shares these responsibilities withsomeone else.
How much power does a power ofattorney have?
You may give your attorney-in-fact as muchor as little power as you wish. You couldchoose to give your attorney-in-fact powerto do some or all of the following:
• Use your assets to pay your everydayexpenses and those of your family;
• Buy, sell, maintain, pay taxes on andmortgage real estate and other property;
• Manage benefits from Social Security,Medicare or other government programsor civil or military service;
• Invest your money in stocks, bonds andmutual funds;
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• Handle transactions with your bank andother financial institutions;
• Buy and sell insurance policies and an-nuities for you;
• File and pay your taxes;• Operate your small business;• Claim property you inherit or are other-
wise entitled to;• Hire someone to represent you in court;
and• Manage your retirement accounts.
How do I create a power of attorney?
You don’t need an attorney to prepare apower of attorney. However, you shouldknow that powers of attorney are requiredto be:
• In writing;• Signed by you in front of a notary
public;• Dated appropriately; and• Clear on what powers are being granted.
If you want to create a durable power ofattorney, you must include a statement suchas: “This power of attorney shall not beaffected by incapacity or incompetence ofthe principal.”
In the back of this booklet in the SampleForms section on page 36, you will findMinnesota’s standard power of attorneyform, as set out in Minn. Stat. § 523.23(2006). This form allows you to choosewhether or not you want the power of at-torney to be durable. A legal power of at-torney form can also be purchased at legalforms stores or drawn up on your own.
Some banks and brokerage companies havetheir own power of attorney forms. If youwant your attorney-in-fact to have an easytime with these institutions, you may needto prepare two (or more) durable powersof attorney, one using your own form andthe forms provided by the institutions withwhich you do business.
What happens if I don’t have a durablepower of attorney for finances?
If you become incapacitated and youhaven’t prepared a durable power of attor-ney for finances, a court proceeding forconservatorship is probably inescapable.Your spouse, closest relatives or compan-ion will have to ask a court for authorityover at least some of your financial affairs.
If you are married, your spouse has someauthority over property you own together⎯ he or she may pay bills from a joint bankaccount, for example. There are significantlimits, however, on your spouse’s right tosell property owned by both of you.
If your relatives go to court to get someoneappointed to manage your financial affairs,they must ask a judge to rule that you can-not take care of your own affairs and re-quest that the judge appoint a conservator.When this person is appointed, you maylose the right to control your own moneyand property. Conservatorships are dis-cussed more starting on page 17.
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When does a power of attorney end?
If you are mentally competent, you may re-voke your original power of attorney at anytime with a signed document, such as theform found on page 39 in the Sample Formssection. The revocation is not effective untilthe attorney-in-fact has received notice ofthe revocation. If you do not revoke it, apower of attorney ends at your death. Ifyou want your attorney-in-fact to have au-thority to wind up your affairs after yourdeath, use a will to name that person as per-sonal representative.
Also, if you get a divorce, and your spouseis your attorney-in-fact, your ex-spouse’sauthority is automatically terminated. Fi-nally, if there is no one to serve as attorney-in-fact, the power of attorney ends. Toavoid this problem, you can name an alter-native attorney-in-fact in your document.
The maker of the power of attorney mayhold the original power of attorney docu-ment. This can allow the maker to remainin control and generally results in a simplerevocation.
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Health Care Directive
What is a health care directive?
A health care directive is a written docu-ment that informs others of your health carewishes. It allows you to name a person (or“agent”) to make decisions for you if youare unable to do so. Under Minnesota law,anyone 18 or older can make a health caredirective.
Why might I need a health care direc-tive?
A health care directive is useful if you be-come unable to adequately communicateyour health care wishes. The directiveguides your physician, family and friendsregarding your care at a time when you arenot able to provide that information. Whileyou do not have to create a health care di-rective (you will still receive medical carewithout one), a directive will help you getexactly the care you would like, particularlynear the end of your life when your inter-ests may not be the same as those who sur-vive you.
How do I prepare a health care direc-tive?
There are forms that you can use to draft ahealth care directive. The Sample Formssection includes a sample health care direc-tive for your use on pages 30-35. You canalso create your own directive or have anattorney prepare one for you, but your di-rective must:
• Be in writing and dated;• Contain your name;• Be signed by you (or someone you au-
thorize to sign for you) when you canstill understand and communicate yourhealth care wishes;
• Have your signature verified by a notarypublic or two witnesses; and
• Include the appointment of an agent tomake health care decisions for you and/or instructions about the health carechoices you wish to make.
Before preparing your directive, you maywish to speak with your physician or otherhealth care provider.
What should I include in my health caredirective?
Your health care directive may contain manyhealth-related items, including:
• The name of the person you designateas your agent to make health care deci-sions for you. You can name alternateagents in case the first agent is unavail-able, or even assign joint agents;
• Directions to joint agents, if assigned,regarding the process or standards bywhich they are to reach a health care de-cision;
• Your goals, values and preferences abouthealth care;
• The types of medical treatment you wantor do not want, including instructions
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about artificial nutrition and hydration;• How you want your agent(s) to make
decisions;• Where you want to receive care;• Your preferences regarding mental health
treatments, including those that are in-trusive, use electroshock therapy or re-quire neuroleptic medications;
• Instructions if you are pregnant;• Your desire to donate organs, tissues or
other body parts; and• Your funeral arrangements.
You may be as specific or general as youwish in your health care directive.
What are the limits on my health caredirective?
Your health care directive is limited as fol-lows:
• Your agent must be at least 18 years ofage;
• Your agent cannot be your health careprovider, unless the health care provideris a family member or you give reasonswhy your agent is your health care pro-vider;
• You cannot request health care treatmentthat is beyond reasonable medical prac-tice; and
• You cannot request assisted suicide.
Your health care provider must follow yourhealth care directive or your agent’s instruc-tions, as long as your health care requestsfall within reasonable medical practice.However, you or your agent cannot requesttreatment that will be of no help to you, or
that cannot practically or ethically be givenby your provider. If your provider cannotfollow your agent’s directions about life-sustaining treatment, your provider mustinform the agent. The provider must alsodocument such a notice in your medicalrecord. The provider must allow the agentto arrange to transfer you to another pro-vider who can and will follow the agent’sdirections.
How do I change my health care direc-tive?
Your health care directive lasts until youchange or cancel it. If you wish to cancelit, you may do one of the following:
• Write a statement saying you want tocancel it;
• Destroy it;• Tell at least two people that you wish to
cancel it; and/or• Write a new health care directive.
Bear in mind that Minnesota law allows youto consolidate your living will, durable powerof attorney and health care directive intoone form for all your health care instruc-tions.
The Minnesota Board on Aging has alsoprepared a useful form for citizens. Youmay obtain that health care directive formby calling 1-800-333-2433.
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Planning a Funeral
How should I plan my funeral?
Under Minnesota law, you may include di-rections regarding your funeral and burialin your will or in a special document yousign for that purpose. You may appoint aperson who has authority to make arrange-ments after your death. Some things to keepin mind when planning a funeral:
• Your budget and true desires shouldguide your choice of arrangements. Yougenerally have the option of choosingcremation, burial in a cemetery plot, orburial in a mausoleum; and
• You may wish to involve several mem-bers of your family, close friends and/or clergy members when you make fu-neral arrangements.
Minnesota law and the federal Funeral Rulegive you tools to control the cost of funer-als. When you request funeral information,these laws require funeral directors to pro-vide detailed, pre-purchase price informa-tion, including a “General Price List” of allservices offered that lists an effective date.Following the funeral arrangement, a de-tailed itemization, called the “Statement ofFuneral Goods and Services Selected,”must be prepared.
There are many laws in place that protectconsumers from deceptive practices by thefuneral industry. For example, a funeral pro-vider cannot require that you purchase a
casket for cremation. A funeral providercannot condition the purchase of one fu-neral service upon the purchase of anotherfuneral good or service. Further, it is againstthe law for funeral providers to charge a feefor handling, placing or setting a funeralgood based upon the fact that the good wasnot purchased from that funeral provider.
How should I pay for my funeral?
You can make your own funeral arrange-ments before you die. You may set asidefunds to pay for your funeral. One way todo this is to invest the needed amount ofmoney, or put it in a bank account, makingsure it will be accessible to family membersupon your death. A second option is toprepay for funeral goods and services.
What safeguards exist for consumerswho pay in advance?
To help safeguard prepaid funds, Minne-sota law requires a funeral director or cem-etery operator to place all prepaid funds ina trust account in a bank or other financialinstitution until the need for your funeralarises, and to advise you of the financialinstitution’s name and the trust account num-ber. Minnesota law allows you to make ar-rangements so that you can receive a fullrefund of all prepaid funds at any time be-fore services are provided.
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There are also safeguards in the law to en-sure that funds are available for the long-term upkeep of cemeteries and mausoleums.Certain cemetery operators must place intrust 20 percent of funds received from thesale of cemetery lots and 10 percent offunds from the sale of mausoleum space.These “permanent care and improvement”trust accounts are to ensure the future careand maintenance of cemetery grounds andbuildings.
Finally, the law requires annual reporting andrecord keeping for both “pre-need” and the“permanent care and improvement” trustfunds:
• Licensed funeral directors must file anannual report disclosing the status of thepre-need trust fund with the State Com-missioner of Health;
• Cemetery operators must file an annualreport disclosing the status of the per-manent care and improvement trust fundwith their County Auditor; and
• The Minnesota Department of Health,Mortuary Science Section offers infor-mation and takes complaints on funeralgoods and services.
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Sample Forms
The forms and table contained in this sec-tion can be downloaded in a separate pdffile in Probate section of the AttorneyGeneral's website. They are available foruse and are prepared according to statu-tory requirements.
The Attorney General's Office is preventedfrom providing legal advice to private citi-zens. However, if you have any questionsabout the forms you may consider contact-ing the Attorney General's Office.
The forms and table included in this sec-tion are the following:
Health Care Directive (page 30)Power of Attorney Short Form (page 36)Revocation of Power of Attorney (page 39)Table of Minnesota Heirship (page 40)
Glossary of Terms
AssetsAll property owned by a person that can beused or made available to use in the pay-ment of debts and heirs.
Attorney-in-factThis person receives the powers allocatedin a power of attorney, such as a right tohandle another person’s financial matters.
BeneficiaryA person or entity designated to receiveproperty under a will or to receive theincome or principal of a trust.
CodicilAn amendment to a will. It is a separatedocument.
ConservatorA person or entity who is appointed by thecourt to make financial decisions on behalfof the impaired person.
DecedentA person who is deceased.
Escheat to the stateWhen no heirs have made claims to eitherall or part of an estate, the state receives theunclaimed estate.
EstateAll of the property owned by a person, in-cluding real estate and personal property.
GuardianA person or entity who is appointed by thecourt to perform duties related to the per-sonal care, custody and control of the inca-pacitated person.
Health care directiveA legal document that lets others knowone’s wishes regarding medical care andtreatment, funeral arrangements, organ do-nation, and other health care concerns.
HeirThose persons, including a spouse who areentitled to the property of a decedent whenthe decedent has left no valid will.
Jointly held bank accountA bank account that is held by two or morepeople each of whom has a right of survi-vorship.
Joint tenancyA property held in joint tenancy is ownedby two or more people who have an undi-vided interest in the property, and the inter-est continues even after the other ownersdie.
Living TrustA living trust is an estate planning devicethat allows a person to transfer assets toone or more persons before and after theydie.
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Payable on death account (POD)An account, such as a bank account, that ishanded over to a specified person uponanother person’s death.
Personal representativeThe person responsible for the administra-tion of an estate. This includes paying credi-tors and heirs.
Power of attorneyA legal agreement that authorizes someoneto handle or share in handling the financialmatters of another person. A “durable”power of attorney can continue to givepower to another in handling financial mat-ters after incapacitation has occurred.
ProbateThe process of settling your estate after youdie, including paying creditors and heirs,and validating a will (if there is one).
PropertyThe money a person has and the things aperson owns.
RevocationIn terms of wills, the process or act of can-celing or destroying an existing will.
WillA legal document that directs where aperson’s property should go after that per-son dies.
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If you are seeking further information, orare considering the services of an attorney,the following resources may also be ofuse to you.
All other Minnesota residents shouldcontact:(612) 333-11831-800-292-4152www.mnfindalawyer.com
Referral Information
From the Office ofMinnesota Attorney GeneralLori Swanson
Consumer Protection445 Minnesota Street, Suite 1400St. Paul, MN 55101
www.ag.state.mn.us
Probate and Planning
Additional ConsumerInformationThe Attorney General’s Office answersquestions about landlord and tenant rights,mobile homes, health care, cars, credit,unwanted mail and phone calls, and numer-ous other consumer issues. The AttorneyGeneral’s Office also provides help inresolving disputes between Minnesotaconsumers and businesses and usesinformation from consumers to enforce thestate’s consumer laws.
The following consumer publications areavailable from the Attorney General’sOffice.
The Car HandbookCitizen’s Guide to Home Building andRemodelingConciliation CourtThe Credit HandbookGuarding Your Privacy: Tips to Prevent IdentityTheftThe Home Buyer’s HandbookThe Home Seller’s HandbookLandlords and Tenants: Rights andResponsibilitiesManaging Your Health CareThe Manufactured Home Parks HandbookMinnesota’s Car LawsThe Phone HandbookProbate and Planning: A Guide to Planning forthe FuturePyramid SchemesSeniors’ Legal Rights
