Wills vs Trusts in Minnesota – Which Do You Need?

Apr 4, 2013 | Minnesota Estate Planning, Trusts, Wills

Planning your estate with an attorney in Minnesota is an important step in protecting your assets, your wishes and the people who matter to you the most. There are a number of options available, as any estate planning lawyer can tell you. Do you need a will? A trust? Is it possible you don’t need either?

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.