When a person owns a non-qualified deferred annuity and leaves it to a designated beneficiary other than a surviving spouse, the beneficiary will then have several different options to receive the funds. It is important to understand the different options and then to choose wisely for the greatest benefit.
Failure to update an estate plan can lead to bitter disputes among heirs, and this was illustrated when the actor Heath Ledger passed away. Ledger died without adding his daughter to his will, which resulted in a costly and public legal battle. Joan Rivers was one celebrity who managed to avoid such pitfalls. The actress updated her will regularly, and the prudent use of trusts kept the details of her estate plan confidential.
A will is often the most important estate planning document for Minnesota residents, and there are times when it may make sense to update one. For instance, when an individual with an existing will gets married, the spouse does not necessarily become the main heir. Instead, state law may determine that the spouse will get half of the estate with parents or children getting the rest. Updating the will may also come in handy when remarrying or divorcing as this could impact who gets what assets under the current will.
For some Minnesota residents, establishing a trust may be a helpful if not essential part of their estate planning. Trusts fall into two basic categories: testamentary and living. Testamentary trusts, as established in the will itself, takes effect only after the death of the will's owner, known as a trustor. A living trust may be enacted while the trustor is still alive.
Estate planning is a complex process that is in some sense unique to each Minnesota resident. A person's family relationships and charitable choices have can have an enormous impact, and outlining how assets are distributed can be complicated. With so many factors to consider, there are many ways for a will to go wrong, and simply the act of naming beneficiaries has many pitfalls of which to be wary.
Individuals who are making a will and reside in or own property in Minnesota may wish to understand more about the probate process. After an individual's death, it may be necessary to settle the estate in court, and this process known as probate. Some wills must be filed in probate court, and once the assets are distributed and debts are settled, probate ends.
Many people in Minnesota struggle over how to best handle their estates in a way that makes things easier for their heirs. Certain types of assets, such as life insurance benefits and retirement accounts, go to named beneficiaries. Homes that have a title with joint survivorship usually pass to the surviving owner. However, arrangements must be made for the distribution of other assets using either a will or revocable trust.
Minnesota residents who are involved in planning their estates might be interested in a recent article discussing tax incentives for holding on to different assets. This might be an important issue to consider if a benefactor has to choose an asset to liquidate in order to pay off certain accounts.
Anyone who is looking to avoid the probate process may wish to put their assets into a revocable trust. Like a will, a revocable trust can be amended to suit the needs of the person administering the trust. The advantages of a revocable trust in addition to avoiding probate include the ease of is administration as well as the lower cost of a revocable trust compared to an irrevocable trust.
Care needs to be taken to minimize the amount of taxes that will be paid either through gifting or inheritance. Gifting is one of a number of tax exemptions individuals can use to reduce the amount of estate taxes.