It might seem tempting to try to save money and do your own estate planning. However, using an attorney for estate planning in Minnesota has many advantages over a do-it-yourself (DIY) approach. Here are some reasons why you should consider using an attorney:
Complexity of Laws
Estate planning laws can be complex, and they vary from state to state. An attorney will be familiar with laws and regulations specific to Minnesota. For example, some state-specific laws include the following:
- Minnesota Estate Tax: Minnesota’s state-specific estate tax exemption amount is currently $3,000,000, and there is no current legislation to change that amount for 2023. The Minnesota estate tax exemption amount has not changed since 2020, and the rates themselves range between 13 and 16 percent. Note that since Minnesota estate tax has a lower threshold than the federal estate tax exemption, you could owe Minnesota estate tax even if your estate is not subject to Federal estate tax.
- Minnesota Gift Tax: Unlike many states, Minnesota does not have a gift tax anymore. However, there is an exception for this in that if you give a gift that exceeds $17,000 in value, this gift may be included in your estate if you die within three years of making the gift. It is essential to be aware of this if making significant gifts as part of your estate planning strategy.
- Minnesota Transfer On Death Deed (TOD Deed): Minnesota law allows homeowners to execute a Transfer on Death Deed, which transfers real estate to a named beneficiary upon the death of the owner without going through probate.
Guardianship
If you have minor children, your estate plan should designate a guardian to care for them if both parents are deceased.
Digital Assets
It is a good idea to make provisions for your digital assets like social media accounts, digital currencies, online storage, and more.
Customization
An attorney can help tailor an estate plan to fit your unique needs and goals. DIY solutions might not cover specific situations or desires.
Avoid Mistakes
Small mistakes in wording or execution can have huge consequences in estate planning. An attorney will ensure that documents are drafted and executed correctly.
Updating Plans
Laws and personal situations change. An attorney can advise when it is necessary to update your estate plan and can help you make those recommended changes.
Trusts
If you want to set up a trust, the process can be particularly complex. Minnesota recognizes various types of trusts like revocable living trusts, irrevocable trusts, special needs trusts, and more. Trusts can help avoid probate, provide management of assets in case of incapacity, and offer tax benefits. It is advisable to use an attorney who is familiar with the different types of trusts and whether there are benefits to setting up one in your particular situation.
Tax Considerations
Estate tax laws are intricate. An attorney can advise you on how to structure your estate to minimize potential tax liabilities.
Reduced Family Conflict
A clear, professionally prepared estate plan can reduce the potential for family disputes after you pass away.
Addressing Specific Needs
If you have dependents with special needs, own a business, or have assets in multiple jurisdictions, you’ll need an attorney to ensure these situations are adequately handled.
Avoiding Probate
In some cases, it may be advantageous to avoid probate – the legal process through which a will is reviewed and assets are distributed. An attorney can advise on strategies to accomplish this.
Protecting Assets
An attorney can provide strategies for asset protection against potential creditors or lawsuits.
Peace of Mind
Knowing that a professional has thoroughly reviewed and prepared your estate plan offers reassurance that your wishes will be carried out as intended. Attorneys also usually have a network of related professionals, like financial planners or tax professionals, who can provide additional guidance and peace of mind.
While DIY solutions might initially seem cost-effective, they can lead to costly mistakes in the long run. These potential errors might result in family disputes, increased tax liabilities, or assets not being distributed as intended. Using an attorney for estate planning in Minnesota ensures that your estate plan is both legally sound and tailored to your specific needs.
Mullen Law Firm can help you navigate your estate planning to ensure that your assets and decisions regarding your estate plan are set forth exactly as you intended. If you need assistance with your estate plan, contact our skilled estate planning attorney today for an initial consultation.