A person in Minnesota who dies without an established will may have their estate handled according to the state’s intestacy laws through probate court. This prolonged process can cost a family a large portion of the estate’s value and make the contents of the state public. To minimize losses, some people might create estate plans that specify exactly how their assets will be handled after death.
An estate plan can also include documentation about who will make financial and medical decisions for a person who becomes incapacitated. Once again, if no plan exists for this situation, a costly court process will begin that makes these decisions for the family.
A study published in 2012 revealed that about half of an inheritance received by a baby boomer was gone in the first 12 months. Trusts are commonly used in these plans to protect assets from the heirs’ creditors and control how the money is distributed. A trust forms a legal entity that holds assets on behalf of an heir. The trust specifies who receives the money and when the assets are received. For example, the trust can issue monthly payments to an heir.
For business owners in Minnesota, another important estate planning topic is business succession planning. An attorney could advise a person on how to preserve a business across generations. A person could learn about the legalities of transferring a business to a family member or employee, and an attorney could draft the documents that put a succession plan in place.