Estate planning is a difficult topic for many people here in Minnesota, and many make incorrect assumptions when considering what to do with their assets after they die. There are those who believe it’s something you do when you get older, while others think having a will is only for the wealthy.
Probate is the legal process of settling your estate after you die where your assets are determined, bills are paid, and your heirs get what’s left. Generally, all estates in Minnesota worth more than $75,000 must go through probate.
Revocable trusts are an option to consider
While there are many ways to distribute your assets, a revocable trust may be an attractive alternative to a will. Instead of having your property go through probate court, they go into a trust, which is a private entity. A revocable trust can be changed at any time while you are alive and should not be confused with irrevocable trusts, which cannot be changed and are generally created for tax purposes.
What are the advantages?
There are many positives to creating a revocable trust, including:
- Skipping the probate court process
- Avoiding a court-appointed conservator in the event of mental or physical incapacitation
- Flexibility allowing changes or amendments until death
- Details are not made public at the time of death
- Distribution of assets can begin immediately after death
What are the disadvantages?
There are also some negatives to consider, including:
- Revocable trusts provide no tax benefits and are not tax shelters
- You must retitle all assets held in the trust
- Heirs have more time to contest a trust, up to three years in Minnesota compared to one year for a will
Seek experienced legal guidance in estate planning
Discussing your mortality or that of your loved ones is never an easy conversation to have. Whether it’s setting up a complicated trust or a simple will, talking to an experienced estate planning attorney here in Minnesota and putting a plan in place can create peace of mind for you and your family knowing that your final wishes will be honored.