Why Have A Will?

I often field the question: "Do I (we) need a Will?" More often than not--actually, MUCH more often than not--the answer is YES.

Let's look at some reasons why a valid Will should be in your estate planning portfolio.

First of all, not having a valid Will means a probate court must decide how your assets are divided up and distributed to your descendants. This is called intestacy. Intestacy is merely a fail-safe created by the Legislature, an attempt at a one-size-fits-all solution, but it is far from perfect.

Having a valid Will helps ensure that your assets go to the persons you want them to, in the amounts you choose. Without a valid Will, Minnesota intestacy law requires the probate court to distribute your assets based on a certain hierarchy, a particular order of who is in line to inherit your estate assets. Without a valid Will giving instructions, the court has to rely on this state-mandated default to determine how your estate is to be divided. That hierarchy may or may not be what you wish to happen.

A valid Will allows you to tailor the proportions of your estate assets you wish to give to family members. Maybe you don't want to divide up assets evenly. Perhaps there is a child who is closer to you or needs more financial help and deserves more. Conversely, there may be a family member who, due to dependency issues or poor money management skills, or who is estranged, is deemed one who should receive less--or none at all. Without a valid Will, the probate court will likely distribute your assets evenly between your descendants, without your input to the contrary.

A valid Will enables you to give certain items of property or money--specific gifts--to individuals or charities. The laws of intestacy make no provision for specific gifts to be given to people outside of the shares given to the legally-mandated heirs. Want to donate some money to a friend or relative, or a charity? Sorry, the laws of intestacy do not accommodate those kinds of wishes. You need a valid Will to make those choices.

A valid Will allows you the freedom to nominate persons to act as your fiduciary--the Personal Representative (executor) of your estate. The job of the estate PR is absolutely crucial and I cannot emphasize enough the importance of this selection. You may have certain individuals in mind whom you can trust to manage your estate after you are gone. Without a valid Will, the probate court decides who will act as the fiduciary. The person they choose may not be the person you want acting in that important role. The PR collects estate assets, pays valid debts, and distributes the remainder to the beneficiaries. If you see no other reason to obtain a valid Will, this is the one that should tip the scales in favor of it.

If you have children who are under the age of 21, a valid Will allows you to nominate a custodian to manage the minor's inheritance until that minor attains the age of 21. Without a valid Will, the probate court chooses that custodian.

If you own real property, your estate must pass through probate, unless you have executed a Transfer On Death Deed (TODD). With a valid Will your chosen Personal Representative will be someone you can trust to work with the probate court, and handle any real estate transactions.

Note that I have used the term "valid Will" throughout this article. I want to point out that just having some "will" may not, in itself, be sufficient. You need a carefully constructed Will, a legal document that reflects your values and wishes. This should be a document crafted by a competent Minnesota estate planning attorney, ensuring that it complies with Minnesota law. Sure, you could go DIY, download some template from the internet and fill in the blanks. But without the careful guidance of a competent attorney who understands your wishes and the legal landscape, your money-saving DIY document may not hold up to legal scrutiny after you die. Is it worth the risk, just to save a little money?

Preserving your hard-earned assets for the security of your family members is too important to leave to chance. Contact a licensed Minnesota attorney to begin protecting your estate.

UTMA: Minors As Beneficiaries.

The Minnesota Uniform Transfers to Minors Act (UTMA) is a set of laws that governs how assets are transferred to a minor, either by Will or in the absence of a Will (intestacy). Minors cannot directly receive assets from an estate; the assets must be held either in trust or in the custody of a designated person, called an UTMA custodian.

The reasoning for these laws is simple: young persons receiving an asset like a house or a sum of money without some adult oversight is usually not a good idea. I think about what may have become of my teen-aged self getting my grubby paws on a big inheritance. I shudder at the thought.

Under the UTMA, a testator can designate a custodian in their Will to manage assets on behalf of a minor child. The child does not assume control of those assets until reaching the age of 21 years. However, if a conservator or personal representative of the estate makes the transfer without specific authorization in the Will, the minor child will get control of the assets at age 18.

If the testator chooses to nominate a conservator in the Will, the probate court makes the final determination as to who shall be appointed as conservator. Minnesota law provides for a priority of who may be appointed as conservator. The conservatorship ends when the minor child attains the age of 18 and the child will gain control of the assets.

Appointing an UTMA custodian in your Will will eliminate the need for an appointed conservator, and allow the assets to be held until the child reaches 21. If the testator desires to have the assets held until the child is older--especially in the cases of large inheritances--a trust is an option, as that instrument allows the assets to be transferred at a designated age.

If you die without a Will and leave behind minor children, a probate judge will determine who manages your assets, and your children might receive them outright at an age in which they are unable to effectively manage them.

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A good estate planning attorney can help you get started with a plan, tailored to your wishes and needs, that will help protect your property for your loved ones.