Basic information about wills and trusts

Wills In very general terms, a will provides direction to the court system about who should get your property after your death. You designate someone to wrap up your financial affairs--commonly called an executor, although the more technical name is “personal representative“ or administrator. You designate who should get what. If you have minor children, you designate someone to care for your children (a “guardian”) and someone to handle the money you leave to your children (a “conservator”). Although most people choose to do so, you are under no legal obligation to leave money to a child (although you must list the child in your will or the law will assume you forgot the child and give them a “forced share”). Please remember that assets you own in joint tenancy or under a contract with a beneficiary designation (such as a life insurance policy) will pass “outside the will”. (By the way, there is some exception or other to almost everything I will say on this page.)

Trusts Think of a trust as a company you set up to own your assets. Even though you pass away, the company goes on and the new “president” of the company (the “trustee”) distributes your assets as you state in the trust. Thus, you do not have to probate your assets. This is an especially useful tool if you own land in another state, as it will likely save having to do a probate in that second state and save a bit of money.

Heath care directive or "Living will" Clicking the hyperlink at left should take you to the “official form” for a health care directive set out in Minnesota law in section 145B.04. This form combines a health care power of attorney and a living will. You may fill out just the health care power of attorney if you prefer, or you may fill out both parts of the form. Click on the link, print the form, and follow the directions contained in the form. If you cannot print this, or if the link is broken, please call or email us and we will email you a copy for free.

Wills for married couples Most married couples, of course, leave all of their assets to their surviving spouse, and then to the children in shares which may or may not be equal. However, there may be good estate tax planning reasons to alter this. If your taxable estate will exceed $1,500,000.00, you definitely want to at least consider putting some assets into a trust and leaving others to your spouse. This is because the estate tax does not kick in until you hit about $1,500,000.00, but when it kicks in it starts at about 35%.

Wills for single persons If you are single, or if you are in a relationship but are not officially married under state law, the statute says, in effect, that everything will go to your children in equal shares; if you do not have children then your property will go to your parents, and if they are no longer alive to your brothers and sisters in equal shares. Therefore, if you wish to leave property to a friend or charity instead of a relative, you should prepare a will that says something along the lines of: “I want $___ to go to my friend Tom and $___ to go to my friend Sally, and $____ to go to the American Red Cross.”

Family trust wills What I call a “family trust” is for people who have minor children. You leave everything to your spouse if he or she survives you, but if both of you die, then you leave everything to a trustee (a person or a bank with trust powers) to manage until the children attain age 21 or so. You can vary this to meet the needs of your own family, of course.