Frequently Asked Questions
Estate Planning Questions
Why do I need a Will?
Practically everyone needs a Will. A Will is needed to:
- name an executor,
- name a guardian for minor children,
- create a contingent trust to distribute your personal possessions, such as family treasures and sentimental items to certain specified individuals,
- dispose of property that may not be otherwise transferred as a result of your death, as in the case where you (or your spouse) are the surviving joint tenant,
- make charitable gifts,
- designate the source of payment of death taxes,
- waive, if desired, the executor's requirement to post bond and obtain security on the bond with a surety company.
What is a revocable living trust?
A revocable living trust is a trust created during the grantor's (i.e., the person creating the trust) lifetime and which becomes effective upon execution (rather than upon your death as with a Will). The grantor retains the power to revoke the trust and reacquire its assets at any time prior to the grantor's death or incapacity. Because the grantor is treated as the owner of the trust assets for tax purposes, the entire proceeds of the trust are includible in the grantor's estate. Upon the grantor's death, the living trust may continue, or the assets may be distributed directly to the trust beneficiaries without the need to pass through probate.
Why would I want a revocable living trust?
A revocable living trust provides several important benefits:
- Probate avoidance. Assets held in a revocable trust at the time of the grantor's death are not subject to probate administration. Ownership of real estate located outside of Minnesota in a revocable living trust is especially beneficial in avoiding the complications of ancillary probate administration in the state in which the real estate is located.
- Privacy. Because a living trust is not a public document, both the terms of the trust and the assets that were transferred to the trust during the grantor's life can remain private.
- Ongoing Management. A funded living trust provides for both the current and the future management of trust assets.
- Disability Protection. Because legal title of the assets held in the living trust is in the name of the trustee of the trust (and not the grantor), the grantor can ensure that if he or she becomes mentally or physically disabled, the trust assets will continue to be managed for the grantor's benefit by the trustee.
- Ease of Administration. A revocable trust is typically easier to administer after the grantor's death. Arrangements can be made for the appointment of additional or successor trustees without court intervention.
- Validity Challenges. It is likely more difficult to challenge the validity of a living trust created during the grantor's lifetime than to prevail in a Will contest. The ongoing management of a living trust may make it more difficult for a person to challenge the validity of the Will by claiming incapacity or undue influence.
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