1. Being married changes everything.
If you are legally married, your spouse has a “marital interest” in your property – regardless of whether the spouse is listed on the deed. The marital interest starts at the time of marriage. Your spouse can make a claim on your property in the case of divorce or your death. If you were to divorce, the court will divide “marital property” “fairly and equitably.” If you were to die, your spouse may be able to make a claim against your estate.
2. Where the money comes from (and what it pays) makes a difference.
In the case of an unmarried couple, if one party makes the mortgage payment, while the other party takes care of other joint bills, the party paying the mortgage could be better off than the other party if the relationship ends. In the case of a married couple, a down payment that comes from pre-marital funds or a “non-marital” source could mean that one spouse is awarded a greater share of the equity in a divorce. But pre-marital or non-marital funds spent on routine home maintenance, utilities, or other expenses could be lost.
3. Being on the mortgage and being on the deed are two different things.
The mortgage is the debt. Being on the mortgage means you are legally obligated to make payments. The deed documents ownership. Being on the deed means you have a legal ownership interest in the property. It can be very easy to give up your ownership interest in property (a Quit Claim Deed is one way to accomplish this), but it is much more difficult to get out of the legal obligation to pay the mortgage (usually requires a sale or refinance).
4. “Tenants in common” and “joint tenants” have different results.
“Tenants in common” means that each owner has an individual interest that can be sold or transferred without the other owners’ consent. Upon death, the interest will pass to the deceased owner’s estate. “Joint tenants,” also known as “joint tenants with rights of survivorship” means that you own the property together, no owner can transfer an interest in property without the other’s consent. Upon one owner’s death, his or her share automatically passes to the surviving owner(s).
5. Owning property with another could put you at risk.
You could find yourself dealing with a lien against the property if your co-owner has questionable financial circumstances (child support arrears, tax debt, judgments) or if your co-owner Medicaid (nursing home) benefits.
It is important to your options before things get messy.
There are several different ways to protect yourself and your loved ones from unintended consequences and contested court battles if you are pro-active. A properly drafted prenuptial agreement, cohabitation agreement, contract regarding property ownership, and/or estate plan can save you from a huge expensive mess down the road.  Before you buy, schedule a Personal Strategy Session and find out what you can do now to prevent trouble in the future.

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In Minnesota, physical custody is the routine, daily care of the children. Parties can have joint physical custody, or one party can have sole physical custody. Joint physical custody does not mean 50/50 – in fact some parties may use the term “joint,” although the children spend almost all of their time with one parent. Parenting time (formerly known as visitation) is the time that each party spends with the children. When figuring out child custody and parenting time issues, here are some things for you to consider:

1. Forget about what you want – focus on your children’s best interests.

Too often times I hear phrases such as “I want full custody” and “he doesn’t deserve 50/50.” The court doesn’t care what you want or what he “deserves.” The court cares about the best interests of the children. Let’s keep the discussion focused on the kids.

2. Take money out of it.

The bias that I have, and the bias that judges, custody evaluators, and other professionals have, is that some people fight over parenting time because of the effect that has on child support calculations. Minnesota’s child support guidelines use a different calculation when the children are with each parent nearly 50% of the time. Some parties get stuck on the schedule because they are tied up on the finances. Focus on the children and figuring out a schedule that works for everyone first, and then talk about the money.

3. Understand that there is not a “one size fits all” arrangement.

When I have a client come to me and say “we just want the normal schedule” or “we want the 50/50 schedule,” I have to ask, “what does that mean to you?” Your family is different, your family’s schedule should be tailored to your family’s needs.

4. Keep in mind your child’s developmental needs.

Consider a multi-step plan. Children need different things at different stages in their lives. A teenager can spend longer periods of time away from one parent than an infant can. The Minnesota Supreme Court Advisory Task Force on Visitation and Child Support Enforcement’s publication A Parental Guide to Making Child-Focused Parenting Time Decisions goes through the different stages of child development and makes parenting time suggestions. This is not the law, and all children may be different, but it is a good starting point. If you have very young children, consider designing a parenting time plan with multiple steps (i.e. until Susie’s first birthday, from age 1 until age 3, from age 3 until age 5, upon starting school…).

5. Maintain as much stability as possible.

The break-up of a family is a very difficult and stressful time for all involved, especially for the children stuck in the middle. Do what you can to maintain stability in your child’s life. How has the family operated while the parents were together? Where were the children going to school and daycare? What activities were the children involved with? Work on creating a predictable schedule that your children can easily adjust too.

6. Consider the practical realities of the situation.

Something that looks great on paper just may not work for your family in real life. If Dad has to work every third weekend, an alternating weekend schedule may cause problems. If one parent is living in Monticello, and the other parent is living in Hastings, mid-week visits might not work. If there is truly going to be a joint schedule, both parents must be committed to staying in the same general vicinity – preferably in the same school district.

7. Take into account work schedules and school activities.

If Mom works every Wednesday night, it generally makes sense for the children to be with Dad instead of with a babysitter every week. If Dad works every Friday night, it makes sense for a weekend to start Saturday morning instead of Friday afternoon. If the kids are in soccer every Tuesday and Thursday night, figure out the easiest way to handle those nights.

8. Remember holidays and vacations too.

A proper parenting time schedule will include not only the regular weekly schedule, but also holidays and vacations. Do not put in your document “the parties shall alternate every other legal holiday.” You probably don’t care where the children spend Flag Day. If your extended family always has a family celebration on the first Saturday of November – then include “Jones Family Celebration (first Saturday of November) in your holiday schedule. Also consider how much vacation time your family needs and what type of notice to the other parent is required. Most of the time, each party is given 2-3 weeks for vacation. But if your extended family is in Europe, and every summer you spend 3 weeks with them, and you might want to have another week or two to take the kids to Disneyland, you’ll want to have more vacation time.

9. Be as specific as possible – but be flexible.

Court orders that award a parent “reasonable and liberal parenting time” are just waiting to cause a fight. What exactly does reasonable and liberal mean? To one parent it may mean every other weekend, to the other it may mean 2 weeks at a time. And to the police officer called to enforce it, it means “a civil matter I don’t want to deal with, go back to court.” Your parenting time arrangements should be as detailed as possible. But at the same time, it is important for both parents to be flexible. Life happens, things come up, and sometimes we all just need to roll with it.

10. Learn to communicate and decide how to resolve disputes.

The divorce or custody case may be over tomorrow – but the two of you will be co-parents for the rest of your lives. How will you communicate about the important events in your child’s life? Are you able to call each other on the phone or send an e-mail to share information? Do you need to use a parenting notebook? Should you maintain some sort of calendar to keep track of the kids’ activities? What happens when there is a disagreement over parenting issues or schedules? Especially when you have young children, there will be many opportunities in the future for disputes to arise. Decide how you will handle these disputes if you are unable to reach a mutual agreement. Will you go to mediation or a parenting time expediter or a parenting consultant? How will this professional be selected?

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A complete estate plan can require several different appointments – personal representative (executor), attorney-in-fact, trustee, health care agent.

These positions are very important and can be complex. A Personal Representative (or Executor) is appointed in a will to handle the closing the estate. Tasks include collecting and inventorying property of the estate, maintaining an estate checkbook to pay final bills, filing probate forms and handling the probate process, preparing final tax returns, and distributing the property in accordance to the will.

An attorney-in-fact is an agent named in a Power of Attorney (POA), this person can act on your behalf as provided in the POA, handling financial or other matters while you are still alive.

A trustee is the person in charge of handling the financial matters of a trust – paying valid bills, making distributions, investing where appropriate, completing required forms.

A health care agent is the person named in a Health Care Directive (also known as a medical power of attorney or living will). The health care agent has the power to make all medical decisions for you should you not be able to speak for yourself. These positions are more than honorary titles, they require hard-work and the ability to handle the tasks involved.

For your estate plan to work smoothly, you must appoint people who are right for the job. Look for someone with the following characteristics:

Willing to accept the position

Do not surprise someone with the appointment, he/she does not have to accept the job, so your estate will run smoother if you select a person willing to take on the task.

Responsible & Trustworthy

The person you name should be someone you would trust your life and your money to (because that’s what you are doing). To prevent family harmony, and avoid future disputes, this person should also be trusted by other family members.

Organized

A Personal Representative or Trustee is in charge of a lot of paperwork and financial tracking. The job will be much easier if he/she is a naturally organized person who keeps meticulous records for his/her own finances.

Focused

Some of these positions could last for years. Some tasks will require hard work and a lot of follow up. Make sure you name someone who will remain focused and get the job done.

Capable of handling the task

Some people just would not be up for the job, sometimes the emotions of the situation may prevent a person from getting the job done. If your daughter is an emotional person anyways, she just may not feel up to the task of handling her parents’ estate.

Able to make a decision

To some people, making a decision is difficult, if not impossible. These people may be paralyzed by the burden of making certain decisions. Do not name your son as your Health Care Agent if he will be unable to make the decisions you would want (such as when to remove life support) when that time comes.

Willing to seek and accept help

Sometimes the position of Personal Representative or Trustee can be overwhelming. You do not want to burden your loved ones. Your nominated person should be willing to seek professional help from a lawyer or financial adviser, or accept offers of help from family, should the task get complicated.

The post Selecting the Right Person Makes a Difference: Personal Representatives, Executors, and other Agents appeared first on Lewis Kannegieter Law, Ltd..

• The woman who used a paralegal forms service for her divorce, where she was awarded an interest in her husband’s retirement account. However, nobody told her that to actually get the money she would need a Qualified Domestic Relations Order (QDRO). Imagine her surprise when at her ex-husband’s death his new wife received “her” interest in the retirement account.

• The people who thought they could save money with their divorce and custody cases by using online services. They spent $200-$1,000 for the exact same forms that are available for free from the Minnesota Judicial Branch. One of these people had the mistaken impression that the place that sold the forms would provide additional support and services. And in the end they all ended up hiring an attorney anyways.

• The people that thought they could handle the child support or custody hearing themselves, but failed to have any understanding of what was involved, what evidence was needed, and what was at stake. Only when they received an unfavorable result in a court order did they seek legal counsel. And by that time, you are playing a different game…

Now I’m not saying everyone needs to hire an attorney. I understand that legal fees can get expensive, and we all tend to have some sort of “do-it-yourself” ambition. But make sure you know what you are getting into and understand your legal rights and the legal process before you find yourself at the point of no return.

Take the time to research and learn about the process and your options. Don’t go into a legal proceeding with your eyes shut.  Consult with a lawyer who will take the time to explain the process and reasonable expectations.

If you need more guidance, but still want to represent yourself, find a lawyer who provides “unbundled” or “limited” services. This is a good option if you just want a lawyer for a limited purpose (such as reviewing a contract or Marital Termination Agreement before you sign it, or helping you prepare for a court hearing.) Some lawyers will do this for an hourly fee others will quote a flat fee, but not all lawyers are willing to provide these services.  (Did you know we offer unbundled legal services virtually?  Check out www.yourminnesotafamilylawyer.com for information on these services.)

Don’t let the fear of legal fees get in the way of having proper representation. Spend some time looking for the right lawyer for you. Make sure you understand the lawyer’s billing policies. Ask the lawyer how you can work together to reduce your fees and ask about payment options. Spending a couple thousand upfront might be a tough pill to swallow, but it may be well worth it in the long run.

The post Think you’re saving money by not hiring a lawyer? Think again. appeared first on Lewis Kannegieter Law, Ltd..

Whereas a dissolution of marriage (divorce) terminates the marital relationship between the parties, a legal separation does not. Parties to a legal separation are still married (so they can not marry anyone else), but a court order will determine the rights and responsibilities of the parties during the legal separation. (See Minnesota Statutes)

Legal separations are very rare, most likely only done for special religious or personal reasons. The process for a legal separation is very similar to the divorce process, both starting with a petition and ending with a final court order. The final court order can address issues of custody, parenting time, child support, spousal maintenance, as well as responsibility for debts and assets.  In a legal separation proceeding, if one spouse wants a divorce instead of a legal separation, a divorce will be granted. If the spouses later decide to divorce, after a legal separation is completed, they will have to go back to court and bring a divorce action. Because of this, getting a legal separation may just double the cost of the ultimate divorce.

The post Don’t I need a legal separation before the divorce? appeared first on Lewis Kannegieter Law, Ltd..

It’s very rare that a person in Minnesota wouldn’t need some form of estate planning. You may think because you don’t have a massive estate the distribution process would be simple and straightforward. Unfortunately, that is not often the case. Instead, your estate, no matter how large or small, will have to go through the probate process and will be distributed according to state law.

Generally speaking, your assets will go to your nearest living relative, which could be a spouse, a child, or a parent. In some situations who you want to receive your assets may be who the state would give them to anyway. But, the process of getting accessing those assets, or transferring title of the asset can be more complicated than you think and require a court probate proceeding.

Beyond the wills and trusts a Total Estate Plan should include a financial Power of Attorney (which will appoint an agent to handle financial affairs on your behalf) and a Health Care Directive (which can provide medical instructions or appoint an agent to make medical decisions on your behalf). Without these documents, a court conservatorship and/or guardianship proceeding may be required should you become incapacitated.

If you choose not to prepare a will or trust, a Power of Attorney, and a Health Care Directive, the law provides for a court process to distribute your assets and appoint the appropriate people to handle your financial affairs and make your medical decisions. The government has already has an “estate plan” for you; you simply have to determine if it’s the plan you really want. Do you trust the courts to name someone to care for you and manage your affairs in the event of incapacity? Are you comfortable allowing them to determine what should happen to your belongings –or in the case of parents who die with minor children, their family –after you are gone? If the answer is “NO,” then it’s time to get a will, trust and other key estate planning documents in place.

If you’re trying to determine the benefits of wills vs. trusts, here are some general guidelines to keep in mind:

Considerations For Wills

• Wills are often sufficient for those leaving behind smaller or less complicated estates
• If you want to leave something to a friend, non-registered domestic partner, or organization you support, a will gives you this opportunity
• A will allows you to choose who will carry out your wishes regarding your estate (the executor or personal representative of the will)
• If you have dependent children, a will can provide you the opportunity to name their guardians in the event of your death
• If you have  minor or dependent children you can create a trust within your will to manage their assets
• Keep in mind a will doesn’t necessarily keep your estate out of probate, so those costs and the time involved will still apply
• When your estate goes through probate, all the matters become part of the public record

Considerations for a Trust

• Those with significant assets or complicated situations should consider a trust
• Those who own real estate in multiple states should generally consider a trust
• Like a will, the trust can usually be revoked or modified while you are still living
• Unlike a will, however, a trust allows your beneficiaries to skip the probate process
• An unfunded trust is no better than no trust at all
• Trusts are held private and the details of them are not made part of the public record

Work With A Minnesota Wills and Trusts Attorney For Best Results

It’s highly recommended that individuals utilize the expertise of a Minnesota estate planning attorney when determining if you need a will or a trust. This skilled professional will be able to steer you in the right direction, not to mention he or she will have experience using wills and trusts to reduce estate taxes, set up funds for surviving family members, and conduct charitable giving in a way which reflects your values. We are happy to help you get started in creating a will or trust which meets the unique needs of your personal and financial situation. Simply contact us today to get started.

The post Wills vs Trusts in Minnesota – Which Do You Need? appeared first on Lewis Kannegieter Law, Ltd..

If you know someone close to you who is in this ordeal, how do you show that you care? Divorce is a touchy topic and the first reaction may be to stay away and mind your own business, but there are some small things you can do to help.

1. Be there for them. It doesn’t matter that you don’t know what to say, or how to say it. Just be there – dealing with divorce is a lonely pursuit, and a friend you can count on will be a great comfort.
2. Don’t be negative. It’s easy to blame your friend’s partner as the cause of the divorce, but relationships are complicated and your negativity will not help any situation. If children are involved your friend will need to maintain a co-parenting relationship with the ex. Instead of being negative, focus on how you can help your friend deal with this trying time.
3. Be understanding. The suffering and grief that one goes through in a divorce can take time to get over. There are a lot of adjustments to make and a lot of information to process. Be understanding as your friend goes through the process.
4. Help out. Offer to help with moving, watching the children, or running errands. It’s the small things that matter the most for people who are dealing with this emotional stress.
5. Encourage your friend to seek professional advice. Help your friend find a trusted and experienced family law attorney to handle the divorce. Encourage your friend to seek advice from a financial planner, mortgage broker, or tax professional. If your friend is having a difficult time dealing with the emotions of a divorce, suggest a family therapist or support group. Do not let your friend receive “legal advice” from friend, coworkers, and other individuals who have been divorced or “know someone who knows someone.” This “advice” is often a combination of horror story and misinformation.

Reaching out and helping someone can be the difference between a miserable divorce, and one that is easier to deal with. In case you know someone going through a similar situation, support them in any way that you can.

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A Health Care Directive will provide your family with peace of mind, knowledge of your wishes, medical directives, information, and avoid potential fights or the need for court proceedings. Without a Health Care Directive your family could find themselves struggling to get information on your condition and fighting over who speaks on your behalf.  Your loved ones could find themselves second guessing decisions that have been made and dealing with guilt over those decisions.  Worst case scenario your family could spend years and thousands of dollars in court fighting over your health care options.

Contrary to popular belief, a Health Care Directive is not just for the old and sick – ALL adults should have a one.  (The contentious court cases involving end of life healthcare decisions that we hear about in the media all involve younger patients – Terri Schiavo was not even 30 years old when she fell ill.)  In fact I encourage all parents to make sure their children have a valid Health Care Directive as soon as they turn 18.

Because I so strongly believe in the importance of Health Care Directives I wrote a book, Why Every Adult Must Have A Health Care Directive, that I am very excited to announce has just been published. In my book, I explain what a Health Care Directive is, why it is important for all adults to have one, and the 8 simple steps to take for complete Advance Care Planning. I have also included a free Minnesota Health Care Directive form in the book (which is also available online at www.lewisklaw.com/mnhcd).

Why Every Adult Must Have A Health Care Directive is available for purchase at Amazon.com and as an ebook through Kindle. To celebrate its release, the ebook will be available for free March 26th through March 30th. The book and a free Minnesota Health Care Directive form is also available through my website at www.lewisklaw.com/mnhcd.

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Small or Large- You Have An Estate

The word “estate” itself can be a reason for the not-so-wealthy to skip out on planning here in Minnesota.  It often brings to mind mansions with grand rolling hills and perhaps a stock portfolio to help with the payroll of personal chefs and gardeners.  In reality, however, the word “estate” refers to any assets that an individual owns.  Some examples might include:

• Your home
• Vehicles
• Insurance policies
• Retirement plans
• Bank accounts
• Land
• Personal belongings

When you see it listed out like that, it is clearer that nearly every one of us has what is legally considered an “estate.”  Not to mention, when you add up the value of these assets, the need for estate tax planning may no longer seem so far away.  Minnesota estate tax comes into play if the value of everything you own, including any life insurance proceeds, is over 1 million dollars. Many individuals reach this threshold much sooner than expected. It makes sense, then, that you would want to have a say in what becomes of those things once you pass away.

How Wills and Trusts Can Work For You

Even with a small estate, in Minnesota, the only way you can have a real say in what happens to your belongings is by creating a legally binding estate plan.  Keep in mind, too, an estate plan isn’t just for when you die; documents such as Powers of Attorney and Healthcare Directives also direct how things will be handled should you become incapacitated temporarily or permanently. Your Minnesota will and trust attorney will help you determine what kinds of medical decisions you would want made, for example, rather than only focusing on selecting beneficiaries for your accounts and jewelry.

If you have minor children, then the need for an estate plan can become even more pressing, as it affords you the opportunity to name your choice of guardians for your children.  Without a legal guardianship set up in advance, the courts will use specific laws and precedents to determine where your children will live and with whom; and the court’s decision may be very different from what you would have chosen.

Weighing The Consequences of Minnesota Probate

When you pass away without a solid estate plan, your entire estate—no matter how big or small—could be subject to probate here in Minnesota.  As with choosing guardians, this court-established process is based entirely on legal precedent and not on your wishes.  Someone will be chosen to distribute your estate according to statute and decisions made by the court.  While Minnesota law has tried to make the probate process relatively easy – it still costs time and money.

Working with a Minnesota trusts and estates attorney is your best approach for protecting what you have, whether it’s that sprawling mansion on the hill or just a few special pieces of jewelry which were passed down by your grandmother.  To learn more about creating a plan which fully protects the people and things you love, give us a call at (763) 244-2949 and ask to schedule your Personal Strategy Session.

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