Groshek Law Blog

The 3-step plan to avoid probate court in Minnesota

There are many reasons that people engage in estate planning. Often, testators' motivation is in their desire to control and protect their assets. Other times, they may have strong feelings about avoiding probate court or even reducing the tax burden on their heirs.

For those wishing to avoid probate court by carefully planning their estates in Minnesota, there are special steps to take. With a little extra care, it is possible to greatly reduce the stress and expense of probate court for your heirs.

How can trusts help with estate planning?

A trust is a common estate planning tool that enables the creator of the trust to dedicate the use of assets to a beneficiary by designating a trustee to manage the arrangement. The trustee controls the assets in the trust and ensures that they are given to the beneficiary in the way that the creator or "trustor" directed prior to their death.

There are many types of trusts. Each has a different purpose and different implications for everyone involved. Understanding the basics regarding trusts can help make sure that people creating estate plans are making the best choices to accomplish their goals.

Keeping older tax returns can be important

Many people in Minnesota assume that they should hold on to their tax returns for three years after the initial filing. In general, the Internal Revenue Service (IRS) has three years to perform an audit or assess additional taxes; three years is also the time limit during which people can file amended tax returns. However, there are exceptions to the three-year rule, and this could make it important to hold on to tax returns for much longer.

When over 25 percent of income was not included on a tax return, the IRS actually has six years to perform an audit and assess further taxes. In addition, if the IRS can prove that the original return was fraudulent, there is no statute of limitations on a tax audit or additional assessment. It should also be noted that even if a person is certain that neither of these cases applies to his or her tax returns, this does not make it a good idea to discard the original filings after three years. Without an original copy, it may be difficult to prove that the tax return was ever filed at all, and these statutes of limitations apply only after the filing was made.

Can an expungement offer you a fresh start in Minnesota?

A criminal conviction can haunt you for years, even after you have paid your debt to society. Whether your offense resulted in jail time or a fine, you will likely still suffer negative consequences of a conviction long after you fulfill your sentence from court.

The criminal record that comes from a conviction or guilty plea can impact many areas of your life, from financial aid for college to employment and even housing opportunities. The good news is that for some people in Minnesota, and expungement can reduce the impact of a criminal record. Seeking an expungement could help you get your life back on track after a criminal conviction.

How family is a threat to an estate plan

Minnesota residents may find that squabbles among family members can have just as large of an impact on estate planning as taxes do. This is according to a poll by TD Wealth of 109 estate planning professionals. Family issues may come into play in cases where a person has been married multiple times or is significantly older or younger than a spouse. Spending time talking with family members can work to create realistic expectations for what they will receive.

For example, if an individual plans on creating a trust, a child could see that as a punishment. However, a child should be made aware of the potential benefits that one can provide. For instance, it can keep money out of the hands of creditors or others who try to make a claim for it. Conversations can also address any conflicts between siblings or between children and parents.

Do you need to plan for long-term care in your future?

Estate planning can be a complicated process. While the basics are important, like naming beneficiaries in your will, there are other things you need to consider as well. Many people create living wills that include power of attorney documents in the event of incapacitation or coma. Others focus on the creation of trusts to reduce tax liabilities and protect special needs heirs, minor children or even pets.

One critical consideration many people forget to plan for is the potential need for long-term care. This is especially important for people who have conditions like Alzheimer's that run in their families. A condition like that could mean that as you age, you will no longer be able to live on your own or care for yourself.

Estate planning for the future of a business

Many parents in Minnesota expect that they will eventually pass their estates on to their children as a matter of course. In general, families want wealth to be passed from parents to children, including businesses, investments and real estate. However, some people may wish to consider alternative ways of handling their assets, especially when their children are already well-off and successful on their own.

While parents may want their children to benefit from the income produced by their assets, they might also have concerns that their kids are not the best people to manage the family business or direct an investment fund. When people have substantial businesses, it can be important to set up an internal succession plan that includes paid managers and officers. The profits and income of the company can still be directed to the owner's children, but a different business management structure may be the best way to keep the enterprise profitable and growing. Management and control of an asset do not need to be combined with benefits from those assets.

Funding trusts

Minnesota residents can include a trust in their estate plan to ensure that their assets are handled according to their wishes after they die. However, it is important that they fund the trust.

Trusts can be used to hold real estate. A deed or deed in trusts can be prepared by an attorney who routinely handles trusts. The deed will transfer the title of the real estate into the trust, transferring ownership of the real estate from the individual to the trust. The real estate is funded into the trust once the transaction has been recorded.

Supreme Court expands Fourth Amendment privacy rights

Americans living in Minnesota and across the nation recently received important new privacy protections. On June 22, the U.S. Supreme Court ruled that, in most situations, law enforcement agencies are required to obtain a warrant before gaining access to someone's cell site location information, or CSLI. Some legal observers are calling the ruling the most important Fourth Amendment decision of the 21st century.

CSLI can pinpoint a cellphone user's location at any time of the day. As a result, law enforcement agencies have found the information useful for certain types of investigations, and, until now, they have been able to access the data if they can provide "reasonable grounds" for needing it. The case before the court involved a man who had been convicted of burglary partly because the police tracked his movements for 127 days using CSLI. The man argued authorities violated his privacy rights under the Fourth Amendment by accessing his CSLI data without a warrant. He further claimed that the Supreme Court's third-party doctrine, which holds that individuals lose their right to privacy when they voluntarily turn over information to third parties, should not apply in the highly invasive digital age.

Special needs trusts could provide long-term support

People with certain disabilities face a dilemma when they receive a large settlement or inheritance. Because of strict Medicaid rules, people who receive government benefits may only own a limited amount of assets in their own names. Fortunately, it may not be necessary for disabled people in Minnesota to choose between forfeiting a large sum of money or giving up their medical benefits.

By putting money in a special needs trust rather than in a personal bank account, a person who receives government benefits may be able to keep both. A special needs trust is an estate planning tool with guidelines specifically for people who receive government healthcare benefits. The trust gets managed by a trustee who ensures that the money is only used for certain expenses. In exchange for being able to keep assets in a trust, any money left over when the beneficiary dies gets transferred to the government to repay the costs of their medical care.

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