The following is our firm summary of some highlights of changes in the law that may be of interest to you:
You can now create a trust to provide for the care of a pet that would terminate upon the death of the pet. This trust can provide for food and medical expenses for a pet in a more formal manner than just leaving funds to a friend or relative for the care of your pet.
Guardian for Minor Children
You can name a guardian in your will to raise your children until age 18. An additional form you may want to consider having prepared for you along with your will is a Designation of Standby Custodian or Guardian. The purpose of this form is to indicate in writing that for the period immediately following your death, that this individual will have the authority to act as guardian for your children until the guardian can be legally appointed by the Probate Court. If you have minor children, this may be an additional document you want us to prepare for you to supplement your will.
Estate Tax Update
As of January 1, 2018, under federal estate tax law, a single individual can leave up to $5,600,000 estate tax free at his or her death, and a married couple can protect two times this amount, or $11,200,000. Any portion of an estate in excess of this amount is taxed at a marginal rate of 40%. Minnesota’s exclusion amount will be rising to the level of $2,000,000 for 2018. The Minnesota legislature passed a law increasing the Minnesota exclusion amounts to 2.4 million in 2018; 2.7 million in 2019; and, 3 million in 2020. However, these increases are still being contested between Governor Dayton and the Minnesota legislature. Also, it is important to note that in Minnesota, a married couple does not automatically have the right to protect two times the exclusion amount from estate taxes if they both pass away. For instance, if a couple passed away having an estate of $3,000,000 only $2,000,000 of the estate would be shielded from Minnesota estate taxes. Minnesota estate taxes are levied at a marginal rate of 13-16% on any amount in excess of the exclusion amount. However, by incorporating a Disclaimer Trust or Credit Shelter Trust in a couple’s wills, they can establish a method to protect up to two times the Minnesota exclusion amount, thus passing more of their estate, tax-free to their beneficiaries.
Motor Vehicle Transfer on Death Beneficiary
Individuals can now fill out a form at the DMV to designate a beneficiary on a vehicle. This can be helpful if a parent wants to leave a car just to a particular child or grandchild. If the owner is married and wants to name someone other than the owner’s spouse, a written consent by the spouse is required.
Limited Liability Company
An LLC formed on or after August 1, 2015, must be governed under a new Minnesota Statute Section 322C. Those that have been established under Minnesota Statute Section 322B can exist under this statute until January 1, 2018. Thereafter, they will be governed by the new law. If you have an LLC, you should contact us to discuss whether you should consider restating your documents to conform to the terms in the new law.
Digital Assets Clause
A law passed last summer established a process by which the personal representative of an estate can be assured access to the digital assets of a deceased user, such as access to any kind of computing device, online bank and investment accounts, data storage, user accounts, and, domain names. You can also specify who you want to get control of these digital assets after your death, or insure that no one can touch them. We are now including clauses related to access to these assets in our documents. If this is something you want added to your documents, we can amend them to include this clause and incorporate these provisions.
It is always important to review the beneficiary designations on your assets, especially if you have experienced a change in circumstances since your documents were prepared, such as a marriage, divorce, death, minor child becoming an adult; birth of a grandchild, inheritance of new retirement accounts or a new job with new work benefits. These designations must be carefully drafted to match your estate planning document, as the terms of these beneficiary designations override the terms of your will.
If you have any questions about any information in this letter and would like to consult with us about how these changes may affect your own circumstances or about updating your documents, please give us a call.
Please remember that we are a full-service law firm. We provide legal services to our individual, business and governmental clients on a broad range of legal issues, including corporate, small business, contract disputes, general litigation, workers’ compensation, criminal matters, real estate, elder law, probate, family law, estate planning, and wills and trusts.
If we can be of any assistance to you, family or friends in the future, please feel free to contact us.