How to Avoid Probate in Minnesota
It saddens me when I have to tell a family that just lost a loved one “I’m sorry but you need to go through probate.”
Probate can be a long, contentious, frustrating and a VERY expensive process. For these reasons, most people will try to avoid probate in any way possible.
So, how do you avoid probate in Minnesota? When people ask me this question I generally advise them to consider the following four options:
- Joint Property Ownership
- Death Beneficiaries
- Revocable Living Trusts
By talking with an attorney about these four strategies, families can avoid headaches, years of time and expense and, most importantly, they can avoid family conflict.
Gifting is an obvious option. If you give your assets away prior to passing away, there is nothing left to go through probate. Before gifting you will want to consider possible tax consequences and, for smaller estates, the possibility that gifting will make you ineligible for medical assistance.
2. Joint Property Ownership
I always advise people, that regardless of the size of your estate, proper estate planning REQUIRES that you review how your assets are titled. If your assets are held jointly you can avoid probate. Holding your property with one more people as “Joint Tenants” means that upon the death of a joint tenant, the surviving tenant takes the deceased tenant’s portion of the property.
3. Death Beneficiaries
Any financial asset that has a beneficiary designations allows you to name a beneficiary to inherit outside of probate. Here are some of the most common financial assets that allow you to do this:
- Payable on Death (POD) Accounts
- Retirement Accounts
- Transfer on Death Registrations
4. Revocable Living Trusts
Setting up a revocable living trust is done by you (the grantor) transferring property to yourself or someone else to manage in trust (the trustee). The trustee (you or the person you named) holds your property for your benefit during your lifetime and for the benefit of others upon your death (the Beneficiaries). With a revocable living trust, the trustee actually owns the property, allowing the trustee to manage your entire estate during any incapacity that you may encounter during your lifetime, and will manage your property for your named beneficiaries after your death, under the terms and conditions of the trust.
By giving ownership of the property to the trustee, the property is no longer a part of your estate and can avoid the probate process entirely.