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Choices abound when it comes to trusts and estate planning

When a person in Minnesota thinks of estate planning, they may immediately think of executing a will that will distribute their possessions to their chosen heirs once they die. However, another estate planning document that may be worth considering is a trust. A trust allows a person to control their assets not just when they are alive but also, in a sense, when they pass on. There are a variety of trusts a person can consider that would meet their various wishes for how they want their assets to be used following their death.

First, it helps to understand what a trust is. A trust is a legal document wherein a person's (known as the settlor) assets are transferred to the trust and are managed by a third-party trustee on behalf of the beneficiaries of the trust. Living trusts are created when the settlor is still living, and they can either be revocable, meaning it can be changed by the settlor during their lifetime, or irrevocable, meaning the settlor must obtain the consent of both the trustee and the trust beneficiaries to alter the trust. Testamentary trusts, on the other hand, are set up in a person's will and do not become effective until the settlor passes away.

Franchising can be an attractive joint venture

Some people in Minnesota who are interested in starting their own business have developed their own product or service that they wish to sell. However, other individuals may be more interested in franchising. Franchising provides a means for establishing a business without having to develop a brand and business model from the ground up. For example, many popular fast-food restaurants are franchises.

Franchises are joint ventures in which franchisors sell their business's name, goods and services to franchisees who are then permitted to use the franchisor's business model and trademark. In exchange, franchisors are paid a start-up fee by franchisees, as well as yearly licensee fees and royalties.

Is that irrevocable trust truly permanent?

Many people may be under the impression that irrevocable trusts cannot ever be modified or revoked by the grantor. However, this becomes problematic when an irrevocable trust becomes outdated or is deficient in some other way as time goes by. Is the "irrevocability" of an irrevocable trust absolute? Not always.

Many states, including Minnesota, have decanting statutes in which assets in an outdated or problematic irrevocable trust can be poured into a new, more suitable, irrevocable trust. The exact requirements for decanting a trust vary by state. However, there are good reasons why an irrevocable trust should be decanted.

You do not have to handle real estate transactions alone

Whether you are buying your first home or breaking ground on a new business, residential and commercial properties can be good investments in Minnesota. However, from the initial offer to the day the keys are handed over to you, real estate transactions are legal matters. Specifically, there are numerous contracts and other legal transactions associated with obtaining a loan and purchasing real estate, and any oversights can be costly.

At Chandler and Brown, Ltd., we represent those purchasing or selling residential and commercial real estate. We understand these transactions can be complex, and many people need professional guidance to meet their real estate goals. We know that our clients' time and money are valuable resources, so we aim to ensure that our clients' real estate transactions are completed in an efficient and effective manner.

These three documents can be key to a well-rounded estate plan

Three documents that most people in Minnesota should consider including in their estate plan are a will, a living will and a durable power of attorney. However, one survey reports that only 18 percent of respondents age 55 and up have executed all three of these important documents. In fact, the survey reports that nearly 50 percent of respondents in this age group have not even executed a will. The silver lining, however, is that 90 percent of respondents reported being willing to discuss end-of-life issues with their loved ones.

This is good, as estate planning is not just for the wealthy. Even if you are of modest means, if you die intestate, your property will go to certain heirs determined by the state. Moreover, if you have minor children and you have not legally designated a guardian for them in your will, should the unthinkable happen and you and your child's other parent both pass away before the child is grown, the state will appoint a guardian without you ever having a say in it.

What should Minnesota business owners know about contracts?

Contracts form the backbone of many operations of a small business. Those engaged in business planning will generally enter into many contracts. Therefore, it is important that small business owners in Minnesota have a basic understanding of the elements that make up a legally valid contract. Keep in mind that this post is only a general overview of contract formation, and that readers who have specific questions regarding contract formation should consult with their attorneys.

First, contracts are formed between parties. These can be individuals or companies. For example, a project owner might form a contract with a contractor or an independent contractor might form a contract with a company. The two parties to the contract must be competent.

Real estate transactions impacted by government shutdown

The federal government shutdown has made waves in many different business sectors across the nation, including those in Minnesota. For example, real estate transactions in Minnesota are being impacted by the government shutdown, especially in rural areas. This is because lenders are unable to generate new government-guaranteed mortgages through federal programs.

For example, farmers wishing to purchase property in rural Minnesota may want to obtain financing through a Farm Service Agency loan or a new business may wish to obtain financing guaranteed by the Small Business Administration. However, these buyers cannot obtain such loans until the shutdown ends.

Will gifts made under new tax laws be 'clawed back' in 2026?

The Tax Cuts and Jobs Act made sweeping changes to America's tax landscape. While certain changes affect those of any wealth, other changes will have a significant effect on those with large estates. People in Minnesota who have a large estate will want to pay particular attention to the new gift and estate tax exemption.

The new tax laws raised the amount of the gift and estate tax exemption to just over $11 million in 2018. This is approximately twice the amount that the exemption was previously. What this comes down to is that a person can make up to $11.18 million in gifts throughout their lifetime or as bequests in an estate plan once they die without the gifts being subjected to the 40 percent estate tax.

Estate planning when you own a business

Small business owners in Minnesota have put a lot of time and energy into their enterprise, watching it grow from a fledgling new business to a successful and fulfilling one. Of course, most business owners are consumed in the daily management of their business. They might not give much thought about what will happen should they unexpectedly pass away. However, death is unpredictable, so it is best to be prepared with the proper plan for business succession.

Of course, one can pass a business on to their heirs through a will or trust. However, there are other estate planning vehicles that can be used as part of business succession. For example, sole proprietors will want to execute a business succession plan. This includes details on the business's assets and liabilities, along with any pertinent accounts and passwords. A successor can be chosen and trained while you are still alive, and, if you want your business to be sold upon your death, you can arrange the details ahead of time.

How can pour-over wills be made part of trust planning?

Estate planning may seem simple at first, but, if one wishes to take full advantage of the opportunity to bypass probate and pass their assets on to their chosen heirs, it is important to execute the right documents. An incomplete estate plan that does not have the necessary wills and trusts may not accomplish what a person wants it to. For example, if a person in Minnesota wishes to not have their estate probated, not only might they execute a trust, but they may also execute a pour-over will to complement that trust and ensure all their bases are covered.

Through a pour-over will, the assets a person has left when they pass away will automatically be transferred into a trust that the person set up while they were still alive. This way, a person can avoid having these assets probated, since trust assets are distributed directly to the beneficiaries of the trust. This makes a pour-over will an attractive option for many.

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