Frequently Asked Questions

A. No, even without a lot of money, you still may have concerns about:

• Who takes care of your children if something happens to you?
• How can you ensure that the needs of a disabled or elderly relative are taken care of and who will manage your affairs if you become incapacitated?
• How can you guarantee that your wishes regarding medical care and life support for yourself are honored?

A. If you made your plan three or more years ago, you should probably review it. Tax laws and your financial situation may have changed.

A. If you die without a Will, the inheritance laws in Minnesota determine who will receive your estate. Minnesota law provides that the estate first pay the expenses of the administration of your estate, funeral expenses, last illness, taxes, debts and family allowances. Then the estate is divided among the surviving spouse and children or other heirs as determined by State law.

A. Probate is the legal processing of your Will after you die. The major drawbacks are that it can be expensive, time consuming and carried out in a public forum. For these reasons, many individuals plan their estate to avoid probate.

A. Any asset you and your spouse own in joint tenancy will automatically become your spouse’s when you die. But you still need a Will to dictate the disposition of your estate and the guardian of any minor children in case your spouse dies at the same time you do. And if either of you have children from a former marriage, you should have a Will to deal with the right allocation of assets among family members.

A. A personal representative is a person or business nominated by a “testator” (the person who wrote the Will) to handle the testator’s affairs upon his or her death. A personal representative, sometimes referred to as an Administrator or Executor, has full legal authority to sell, transfer, dispose, mortgage or litigate the decedent’s estate.

A. Yes. A “Durable Power of Attorney” is one that remains valid even if you become incompetent or incapacitated. An ordinary (non-durable) Power of Attorney expires if a person becomes unable to make his or her own decisions. “Durable” Powers of Attorney can be prepared either to take effect immediately or to go into effect only if you become unable to make decisions for yourself (“springing”).

Your Power of Attorney may be a “general” or “limited” Power of Attorney. A “general” Power of Attorney authorizes your attorney-in-fact to conduct all of your business and financial affairs. A “limited” or “special” Power of Attorney authorizes your attorney-in-fact to conduct specified business, perform specified acts, or make certain decisions on your behalf.

A. If you are mentally competent, you may revoke your original Power of Attorney at any time with a written and signed Revocation of Power of Attorney document. The revocation is not effective until the attorney-in-fact has received notice of the revocation. If not revoked, a Power of Attorney ends at your death.

A. A Power of Attorney can be used to grant any or all of the following legal powers to the attorney-in-fact:

• Buy, sell and maintain real estate
• Banking transactions
• Make investments such as stocks, bonds or mutual funds
• Make legal claims and conduct litigation on your behalf

You can also authorize the attorney-in-fact to transfer any of your property to himself or herself. This is called self-dealing. You should not grant this power without first seeking competent legal advice.

A. No. In Minnesota the proper legal instrument for naming a health care agent to make health care decisions on your behalf, or to leave written instructions regarding your health care, is called a Health Care Directive.

A. You must be very careful about whom you appoint to be your attorney-in-fact because this person will be able to have unrestricted access to your financial affairs. You should choose a trusted family member, a proven friend or a professional with a reputation for honesty and trustworthiness. Remember, it is very difficult to get money or property back if he or she does not handle your affairs wisely.

A. Yes. You may appoint more than one attorney-in-fact. If you decide to appoint more than one person, you must determine whether they must act together in making decisions on your behalf or whether each will have the authority to act independently of the other.

A. Yes. The attorney-in-fact named in a Power of Attorney is your representative. As long as you have the legal and mental capacity to manage your financial and legal affairs, you can direct and manage your attorney-in-fact’s use of the authority granted under the Power of Attorney.

A. The attorney-in-fact is obligated to act in your best interests. The attorney-in-fact must safeguard your property and use your finances wisely on your behalf. You can require the attorney-in-fact to provide periodic accountings.

A. There is no official or government agency that monitors attorneys-in-fact. Therefore, it is extremely important that you choose as your attorney-in-fact a trustworthy, honest individual. You can, however, include in your Power of Attorney a requirement that your attorney-in-fact provide periodic accountings to you and to any other person you designate.

A. The Court will likely appoint a conservator to handle your financial affairs. This is a more costly, time-consuming and less flexible way of handling your affairs. It does, however, provide you with more safeguards than the Power of Attorney in that the Court supervises the attorney-in-fact and requires annual accountings.

A. No. The Social Security Administration and Internal Revenue Service have their own separate “Powers of Attorney.” For Social Security, this is called Representative Payee Status.

A. The need for a probate depends on what property the decedent owned and whether he owned it alone or with others. Property, such as real estate that is held in joint tenancy, jointly held bank accounts, payable-on-death accounts, life insurance or pension benefits designated to a specific beneficiary, do not need to go through probate. All assets that were in the decedent’s name alone at the time of death must be probated.

A. No. The determining factor is how the assets were held, not whether you had a Will.

A. Yes. If your probate estate is worth less than $75,000 your heirs may be able to collect that asset by using an Affidavit of Collection of Personal Property which does not require any court involvement.

A. If there is a Will, the personal representative is charged with distributing the estate property according to the terms of that Will. If there is no Will, Minnesota inheritance laws govern the distribution of the estate. The law is complex and anyone who does not have a Will should consult an attorney to determine whether the distribution that would be made under the laws of intestacy are the results that you would want.

A. There are ways to avoid probate. If all of your assets are held in joint tenancy, have a payable on death beneficiary or are held in certain types of Trusts, there may be no need for a probate. Depending upon your personal circumstances, this may or may not be an advisable and/or cost effective approach. We can help you determine whether you should consider these alternatives.

A. A conservator has power over the estate. S/he takes care of money and property, handles the income and pays the bills of the protected person. The conservator must report to the court on a periodic basis (usually annually) regarding the income and disbursements of the conservatorship. S/he can be held responsible for mismanaging the estate.

A guardian makes personal decisions for the ward, such as medical care or where the person will live.

A. An attorney-in-fact under a Power of Attorney and a conservator perform many of the same functions. However, the Power of Attorney is granted by an individual while he or she is still able to do so. Once an individual becomes mentally incapacitated, it is not possible to execute a Power of Attorney and therefore, the only alternative is to have a conservator appointed by the Court. The conservator will be supervised by the Court; there is no court supervision of an attorney-in-fact under a Power of Attorney.

Because a Power of Attorney is the least restrictive alternative, less costly and less public, it is preferable to plan ahead and execute a Power of Attorney if you have someone whom you can trust with your financial affairs.

A. A petition is submitted to the court requesting that the petitioner, or another person, be appointed as conservator or guardian. The person who would become the protected person must be given notice of the proceeding and has the right to be represented by an attorney. The person filing the case must show clear and convincing evidence that a guardianship or conservatorship is needed.

A. Yes. The court can end the guardianship or conservatorship if the protected person shows the court that s/he no longer needs help or protection.

A. A Will is a legal document that directs how your assets and property will be distributed upon your death. It also enables you to name a guardian for your minor children. You will also name a Personal Representative to handle the affairs surrounding your estate. This person will gather your assets, pay outstanding debts and distribute the remaining assets to the beneficiaries that you have chosen.

A. If you die without a Will, the inheritance laws in Minnesota determine who will receive your estate. Minnesota law provides that the estate first pay the expenses of the administration of your estate, funeral, expenses, last illness, taxes, debts and family allowances. Then your estate will be divided among your surviving spouse, children or other heirs as determined by Minnesota law.

If you own assets or property titled in joint ownership or tenancy, when you die the surviving owner will inherit those funds or property even if you do not have a Will. If you do have a Will, the provisions of your Will do not govern the assets that were titled in joint ownership.

Assets where a beneficiary has been named will be distributed to the beneficiary upon your death, even if you do not have a Will. If you have a Will, the provisions of your Will do not govern the assets that are held with a payable on death beneficiary.

A. If you have minor children, your Will should nominate someone to serve as your children’s guardians if both you and your spouse die. If you die without a Will, or your Will does not name a guardian, the Court will determine who should serve as your children’s legal guardian.

A. No. A probate may be necessary to settle your estate after you die if you own assets alone and without beneficiary designation. If there is property to be distributed or taxes that need to be paid, a Will does not avoid the probate process. If you own real estate that is not held in joint tenancy with right of survivorship, or has not been placed into a Trust, then it must be distributed through the probate process.

A. A Trust is a separate legal entity which is created with a written agreement between the grantor (the personal creating the Trust) and the Trustee (the person who will manage the Trust). Assets from the grantor’s estate are transferred into the ownership of the Trust and the Trustee is charged with prudently investing and distributing those assets according to the terms of the Trust Agreement. The Trust Agreement will commonly have provisions for management during the grantor’s life, during his or her incapacity and following his or her death. The most commonly cited reason for selecting a Revocable Living Trust over a Will is avoidance of a probate.

A. The “Living” Trust is made while the person establishing the Trust (known as the grantor) is still alive and the grantor’s property or assets are transferred into the Trust. The Trust appoints a Trustee to manage the property placed into the Trust and sets forth instructions regarding the management and distribution of the assets. You may choose to serve as the Trustee of your own Trust.

Living Trusts can be revocable or irrevocable.

The most popular type of Trust is the Revocable Living Trust, which allows the individual to make changes to the Trust during his or her lifetime. A Revocable Trust usually directs the Trustee to pay all income to the grantor for life and to pay the Trust assets to named beneficiaries after the grantor’s death. Revocable Living Trusts avoid the probate process but do not provide shelter from federal or state taxes or long-term care costs.

An Irrevocable Living Trust is usually set up to reduce estate or income taxes. For tax purposes, the Trust becomes a separate entity; the assets cannot be removed, nor can the grantor make any changes to the Trust. In most cases, the grantor cannot be the sole Trustee of an Irrevocable Trust without losing the tax benefits.

A “Testamentary” Trust is created by the grantor’s Will and certain property is transferred to the Trust after death. The assets to fund these Trusts may need to go through the probate process, and may be supervised by the court even after the estate is closed. An example of a Testamentary Trust would be one created when a parent, through his or her Will, leaves assets in a Trust to benefit a minor child. The Will establishes the Trust to which the property is transferred, to be administered by a Trustee until the child reaches a stated age, at which point title to the assets will be transferred to the child.

A. The inheritance laws that protect a surviving spouse do not apply to unmarried couples. If one of the partners of an unmarried couple dies without a Will or Trust, the surviving partner will not automatically inherit any part of the estate. Therefore, it would be prudent for unmarried couples to have a Will or Trust.

A. Medicare will pay for up to 100 days per spell of illness for skilled care in a nursing home. To qualify, you must have been an inpatient in a hospital for at least 3 days and nights, (3 midnights) and be admitted to the nursing home within 30 days of the hospitalization. The first 20 days are covered in full. The next 80 days are covered with a substantial daily co-payment that is often paid by supplemental health insurance.

A person must have a medically diagnosed need for skilled care services for Medicare to continue its coverage. If the person no longer requires skilled care services, Medicare will stop coverage at any time during the 100 days.

If you only require personal care, such as assistance with feeding, dressing, toileting or bathing, then Medicare will not cover a stay at the nursing home.

A. No. The Minnesota Veterans Homes operate under their own sets of rules and regulations. Once admitted, an individual is responsible for paying a monthly maintenance charge, which is individually determined under the Minnesota Veterans Homes rules. These rules are different from those used to determine eligibility for Medical Assistance. We can help our clients determine which program would be advantageous and how best to plan for a placement.

A. No. It’s not too late. While your options may be more limited at this point, there are still many effective planning tools that you can implement. Even if an individual has already been placed in a nursing home, there are still many ways in which we can help develop a plan that will provide financial security to the nursing home resident and family members.

A. Many of our clients have heard things about the Medical Assistance program that are not true. Part of our job is to make certain that our clients understand the complexities of the program. The rules are intended to prevent the community spouse (the spouse still living at home) from becoming impoverished. You will not lose your home, and the rules permit, under many circumstances, the community spouse to receive some of his or her spouse’s income.

Understanding the program will provide you with peace of mind.

A. Yes. There are several programs that provide funding for home and community-based services, including one program (Community Alternatives for Disabled Individuals) that provides coverage for eligible individuals under the age of 65. The types of services covered include respite care, homemaker services, day care, personal care assistant services, and home health aide services, to name just a few. The programs that provide such services are Elderly Waiver (EW), Alternative Care Grant program, Community Alternative Care (CAC), Community Alternatives for Disabled Individuals (CADI) and the Traumatic Brain Injury Waiver. Each program has its own set of eligibility criteria, which are similar, but not identical to the Medical Assistance program.

A. Making gifts can be an integral part of an estate plan. Some individuals with large estates use gifting as a way to reduce the size of their estate and minimize the potential of having a taxable estate. Others use gifting as a way to protect assets if they anticipate qualifying for public benefits. In any case, such transfers are serious steps and should not be undertaken without competent legal advice. We can assist you in determining if making a large gift would be advantageous and can advise you on the proper way to do so.

A. You do not need an attorney to prepare a Health Care Directive for you. The forms are available at many locations, including the Web site of the Minnesota Board on Aging. However, if you need help understanding the document or making a decision about how to state your wishes, we are happy to help.

A. No, it does not. A Power of Attorney deals only with financial matters and does not give your attorney-in-fact (agent) any authority to make health care decisions on your behalf.