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Helping You Navigate Complex
Legal Issues

Helping You Navigate Complex Legal Issues

Minnetonka Estate Planning Law Blog

Gregory A. Lang

Passing Down The Family Cabin

Thousands of families across Minnesota own lake cabins and vacation homes. These properties are the source of many memories. Even when children pass into adulthood, a cabin will still retain significant emotional value, to say nothing of its financial value. Any parent who owns a vacation property must consider many factors when deciding whether to pass on the property or sell it.

A careful, clear-headed strategy will help you maximize enjoyment of the property and minimize family strife. A lawyer with experience in both real estate and estate planning can be instrumental in helping you achieve your goals.

What estate assets are exempt from creditors?

People in Hennepin work throughout their entire lives to accumulate assets that they can then pass on to their children. However, at the same time, they may also accumulate debts. If you have been asked to serve as the personal representative or executor of an estate, then you should know what to tell beneficiaries when they ask how the estate’s debts will affect their inheritances. Fortunately, you may have some good news for them.

Minnesota state law allows for certain exemptions on estate assets. This means that an allowed portion of these assets may be exempt from any claims that creditors may have against the estate. These exemptions begin with the descent of homestead, which according to the law states that the entire value of the homestead is exempt from all claims other than state health care or assistance, provided it is passed to either the surviving spouse or descendants. If in your case there are no descendants and the home will be passed to another party, then it is subject to any claims against the estate.

Actor Harrison Ford’s ex-wife’s will is missing

For many in Hennepin, the task of preparing a will can be a difficult one. It may involve making tough decisions about which of one’s heirs will receive what and the manner in which they will receive it. However, at least one may able to take solace in the fact that once the will has been drafted, his or her work is done. Or is it? After all the time and effort that went into creating such an important estate planning document, one could realistically see that all go to waste if his or her will is not filed or stored in the proper location.

As odd as it may sound, the family of actor Harrison Ford is currently dealing with such a scenario right now. The will for Ford’s ex-wife, who passed away from complications due to cancer late last year, is currently missing. Without it, it may difficult to know how she intended her estate to be disbursed. Sizeable assets are at stake from both her 2004 divorce from Ford as well as her continued work as a screenwriter. Those assets are currently held in a trust, and are presumably intended to go primarily to the former couple’s two adult children. While a copy of the will is sufficient to allow the estate to be administered, it has not been reported who may have access to one.

Achieving asset protection through a spendthrift trust

As Hennepin residents begin to plan the process of transitioning their assets to their heirs or beneficiaries, concerns may arise over how those assets will be handled once they are distributed. The hope is that beneficiaries will have the skills necessary to manage their bequeathed assets wisely. However, that is not always the case. Fortunately, trust grantors can maintain some control over how a beneficiary’s interest in a trust is used through a spendthrift clause.

In a broad sense, a spendthrift trust protects a beneficiary from using the assets given to him or her through the trust unwisely. In many cases, such beneficiaries may already have significant debts even before receiving assets through a trust. A spendthrift trust also provides protection against a beneficiary’s trust interest from immediately being forfeited to a creditor.

Amending a joint trust

We here at the Lang Law Office often work with couples in Hennepin looking to set up joint trusts to help manage their assets and prepare for the transition of those assets to their children. If you have set up such an account with your spouse, you may believe that you will never have to amend it. Yet what if you do? How much freedom are you given to change a trust for which you and your spouse are both settlors? Such information may be important to have before the issue of an amendment ever comes up.

There are several reasons which may require the amendment of a joint trust. You may relinquish ownership of a property held within it. If your children are named as beneficiaries, and one happens to pass way, you may want to revisit the terms of the trust in order to allocate his or her share of the assets to his or her surviving siblings. However, the most common reason to amend a joint trust between spouses is due to divorce.

Reviewing Minnesota’s definition of incapacitation

For many in Hennepin, the thought of having their decision-making privileges given to another without their consent may provoke fear and anger. However, that is exactly what they may face if they are determined to be incapacitated. Adult guardianship cases are not all that uncommon in the U.S.; while information collected by the National Center for State Courts puts the number of such cases at only 87 per every 100,000 American adults, those numbers only reflect statistics shared by 14 states (Minnesota was not one of them). Thus, the actual number of cases could be much higher.

The determination of one’s capacity to adequately care for him or herself is made by the court. In Minnesota, the law defining incapacitation states that in order to be classified as such, a person must meet both the following criteria: First, he or she does not demonstrate the capacity of understanding needed to make sound decisions related to him or herself.  Next, he or she must exhibit behavioral deficits that call into question the ability to see to his or her own personal needs regarding:

  •          Health care
  •          Safety
  •          Shelter
  •          Nutrition
  •          Clothing

Media mogul and ex-girlfriend battle for control over his care

The circumstances surrounding one’s life in Hennepin can change from year-to-year, month-to-month, and even day-to-day. The tricky thing that he or she must remember to do is amend his or her estate planning documents along with those changes. Oftentimes, they reflect the end of a relationship between two people. Depending on how things end, one side may want to rethink his or her decision to include the other in his or her estate plans. Acting upon such thoughts quickly may just be the key to protecting oneself if the other side of such a relationship attempts to use his or her assumed role in the estate to force his or her way back into the picture.

Media mogul Sumner Redstone appears to be facing such a scenario as his attorneys work to block attempts by his former girlfriend to assume control of his care. The elderly owner of National Amusements Inc., which controls media giants CBS and Viacom, had assigned medical decision-making privileges to the woman in past estate planning documents. However, once the relationship ended, Redstone was quick to change those documents and pass that control on to a business partner. His former companion is alleging that recent health complications have left Sumner unable to comprehend such a decision, and therefore asking that her authority over his care be reinstated. Yet Sumner’s own legal team is countering her claims with doctors’ reports showing that Sumner is currently in good health and completely in control of his mental faculties.

What is ademption?

If you have been named as a beneficiary to an estate by a family member or friend in Hennepin, the prospect of receiving the asset or property bequeathed to you is no doubt exciting. Yet what if you were to find out that the property was no longer owned by your deceased loved one? Would your claim to it as the named beneficiary in his or her will still stand? This question inevitably leads to an in-depth evaluation of the legal principle of ademption.

Ademption is revoking the right of ownership of a beneficiary over property that a testator no longer owns. It comes down to the simple fact that someone cannot give you something that he or she has already given up. Thus, if it is discovered that your loved lost ownership of the asset he or she meant to leave to you either by sale, gifting, or destruction, you have no claim to that property.

What are the privacy benefits of a trust?

Just how much do you value your privacy? If you are like most in Hennepin and throughout the rest of the U.S., then the answer to that question is very much so. In fact, a study conducted by the Pew Research Center whose results were shared by the Electronic Privacy Information Center showed that 74 percent of Americans believe that being able to control the access to their information is vitally important.

So how does this apply to estate planning? If your estate planning is structured solely around a will, then you need to remember that once your will is processed through probate, it becomes public record. This allows anyone who wishes to simply secure a release of information form and get all the details of yours and your family’s current financial situation, including sensitive information such as:

  •          Your liquid assets
  •          Your real estate holdings
  •          The current value of all of your investment, retirement, and savings accounts

Reviewing the different types of long-term care

For many in Hennepin, the common school of thought is that estate planning begins and ends with determining who assets are dispersed to upon one’s death. However, another critical component to such planning is determining how he or she will be cared for prior to death. According to the website LongTermCare.gov, 70 percent of Americans over the age of 65 will require some form of extended care during their lifetimes. The estate planning component of such care is determining what form of it one will receive, and how it will be paid for.

The more popular forms of long-term care in the U.S. include:

  •          Nursing homes: These are facilities where residents may require consistent medical supervision in order to complete the activities of daily living.
  •          Assisted living center: These differ from nursing homes in that their residents typically require only support services and access to basic health care assistance.
  •          Continuing care retirement communities: Similar to a standard retirement community, these offer separate living spaces such as full apartments or condominiums, with shared access to skilled nursing services on-site.

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