Practice Areas

Estate Planning & Probate

Was your Will created before 2008?

Transfer on Death Deed (“TODD”)

In 2008, Minnesota’s legislature passed a law allowing an owner of real estate to have their real property transferred upon death to beneficiaries. This is done by executing and recording a deed known as a Transfer on Death Deed (“TODD”).

I frequently advise my clients to use TODDs as part of their estate planning. They are a relatively simple, straight-forward method to avoid the cost of probating real estate. Parents, for example, through a TODD can transfer to their children their home upon death and little more work than providing a death certificate is needed.

Here’s the positives I like:

If you had your estate planning done prior to 2008, contact our law office to schedule an appointment to see if a TODD is right for you.

Wills don’t prevent probate

The most common mistake individuals make in their estate planning is believing the will they executed prevents probate.

The major benefit of a will, a very important one, is assuring that the administration of your estate will be conducted according to your unique personal wishes and not according to the one-size fits all direction by the government. However, your estate will still have to go through probate unless you’ve either made death beneficiary designations on your assets or created a trust which is administered outside the probate system.

Often, the best way to have your estate avoid the cost of probate is to have transfer on death designations for your various assets. Your home or other real estate can be transferred upon death through the use of a Transfer on Death Deed (see “TODD” above).

Probate: Personal Representative

The Personal Representative handles the settling of an individual’s estate upon their death. There are generally two routes by which one becomes a Personal Representative. The first is they are designated as such in the decedent’s Will. The second is the Court designates them as such, generally where the decedent died without a Will (called ‘intestate’).

The main roles of a Personal Representative are as follows:

  1. Identify and secure all the assets.
  2. Identify all debt/creditors and make sure they are paid, if the estate is solvent.
  3. Distribute any assets, after debt, to those individuals designated in the decedent’s will, or if they died intestate, according to Minnesota statutes.

Generally speaking, the average person can perform their entire role as Personal Representative, without an attorney, but many don’t, with some good reason. First, probate is filled with numerous rules to follow. These many formalistic steps can grind down many people. Second, while Personal Representatives are usually not personally liable for good faith acts, it doesn’t shield one from the anger and/or frustration of others, often family. Finally, retaining an attorney can often help a Personal Representative buffer themselves from difficult family members.

Personal Representative versus Attorney-in-Fact (Power of Attorney)

Frequently, I have clients in my office confused on the difference between a Personal Representative and an Attorney-in-Fact.  An Attorney-in-Fact gets their power from an executed Power of Attorney document.  The Attorney-in-Fact is only able to function in their capacity so long as the Principal (individual giving the power) is still alive.  On their death, their delegated authority ends.  Also, there is a term known as “durable Power of Attorney”.  This refers to the power continuing after the Principal becomes incapacitated mentally from a condition such as Alzheimer’s or dementia.

The Personal Representative takes their power following an individual’s death (then the deceased person is referred to as ‘decedent’).  Another important part, this designated Personal Representative (through a Will document) does not have any authority to act until a Court issues what is known as ‘letters testamentary’.

There can also be a difficult gap between the end of an Attorney-in-Fact’s authority to act (upon principal’s death) and issuance of the letters testamentary.  I sometimes recommend to clients that they open a convenience joint account with a child.   This allows seamless continuation in check writing ability to pay bills. However, this is much better explained in detail with an attorney over a meeting as there are also downsides to a joint account.

Call our office today at 218 722 5809 to review or begin your estate planning. Contact Us

 

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