When it comes to estate planning in Minnesota, not everything is black and white. Each estate plan can and should be designed and created based on the person and their unique situation, beliefs and wishes. It takes thought and consideration. Before you begin or update your estate plan, start by reviewing some of the various options available to you and your family.
Trust vs Will
A trust is a “living, breathing will” according to Attorney Lauren Fink of Maser, Amundson & Boggio. Within a trust, there is the grantor, this person is usually considered the owner of the property; the trustee, who has access and control of the property that is held by the trust; and the beneficiaries, who are entitled to receive the beneficial interest of the property that is held by the trust.
The difference between a trust and a will is that a trust does not go through the probate process and is effective during your lifetime unlike a will, which takes effect after your death. Additionally, a trustee has the control to manage your property during your life or during any period of incapacity, whereas the person appointed in your will does not. Many individuals have both a trust and a will as part of their estate plan. A will used with a trust is called a “pour over will” and is used to “catch” any property that may end up in the probate process because it was not retitled to the trust.
Common Trusts
There are five common trusts you will likely come across in the estate planning process:
- Revocable trusts are the most common trusts, and are designed to direct what happens with your property during your life, during any period of incapacity, and after your death. A revocable trust can be altered, amended or revoked.
- Irrevocable trusts generally may not be changed, especially by the grantor. These types of trusts may be used for tax planning or asset protection.
- Testamentary trusts are created after your death and are frequently used in planning for persons who have children who are still minors.
- Special needs trusts and supplemental needs trusts designed to hold assets for individuals with disabilities who may receive government benefits subject to asset limitations.
Selecting the Right Trust
The laws and regulations surrounding trusts are complex and ever-changing. It is important to understand your purpose and goals in creating a trust, which is why many individuals use a trusted elder law attorney to assist in the process. A trust should be carefully drafted in order to ensure the grantor’s estate planning wishes are carried out and so that the benefits received by any beneficiary are not affected.
Questions About Your Estate Plan?
Whether you find yourself in a complicated or simple family situation, consider consulting an experienced estate planning law firm to help navigate your options. This is often your first step to discuss your goals and concerns. Keep in mind, there is no “one-size-fits-all” estate plan. With a multitude of tools you can utilize to customize and tailor your estate plan, you will be able to satisfy your specific needs and wishes.
To learn more about “Trusts and Complex Estate Planning”, watch the below interview with Attorney Lauren Fink.