Probate court proceedings in the aftermath of a person’s death can be complicated. This is the process in which a deceased person’s assets are transferred to those who will inherit them, and this process can be lengthy, costly, and confusing. However, there are ways to avoid the probate process in Minnesota.
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Minnesota law allows people to establish living trusts to avoid probate for most every asset that you own. This includes real estate, vehicles, bank accounts, art collections, and more. In order to create a living trust, a trust document needs to be established. This is similar to a will. The living trust will name someone to take over as a trustee after your death (called the successor trustee).
A living trust takes effect when you transfer the ownership of your property to yourself as the trustee of the trust. Essentially, the trust will own all of your property, and you will have control over the trust while you are living. When that transfer is complete, the property will be controlled by the terms agreed upon in the trust document. After your death, the successor of the trust will be able to transfer assets in the trust to beneficiaries without going through the probate court proceedings.
If you own property jointly with somebody else, and this ownership includes the “right of survivorship,” then the other owner(s) of the property will be able to avoid probate court for that particular property after your death. When there is a right of survivorship, the surviving owner automatically owns the property when the other owner passes away. In Minnesota, the right of survivorship is available if assets are owned in joint tenancy. Any assets owned in this way will automatically pass to other surviving owners when one of the owners passes away. No probate court is necessary for these situations. Joint tenancy works well in Minnesota with real estate, bank accounts, vehicles, and other valuable property.
Gifting assets is one way to avoid probate, but it must be done before a person passes away. If a person gives all of their assets away to beneficiaries before they pass away, then there will be no need to go through probate court. Before gifting assets, you need to consider all possible tax consequences for both yourself and the person or people receiving the gifts.
Any asset with a beneficiary designation allows the principal to designate a beneficiary to inherit the asset outside of probate court. Some of the assets that have beneficiaries include retirement accounts, payable on death (POD) accounts, transfer on death registrations, and more.
When you or somebody you care about has begun to plan for your passing, regardless of your age and total amount of assets, you should work with an attorney. A skilled Minnesota estate planning attorney will bring extensive resources to your side. They will understand trusts, joint property ownership, gifts, and more. At Knutson+Casey, our team is ready to help you make these important decisions and help ensure that you and your family are properly taken care of. When you need a Mankato estate planning attorney, you can contact us for a free consultation online, or call us at (507) 344-8888.