There are several ways property can be transferred at death. Our estate planning team is here to help you sort through the options and come up with a plan to fit your individual needs. Here are some of the options:
Will – A will requires a probate in which the court appoints a personal representative and oversees the payment of your expenses and the distribution of your assets.
Beneficiary Designation – Designations made directly on assets, including financial assets, like life insurance or retirement accounts, will control the disposition of those assets. Your named beneficiary claims those assets directly from the administrator or institution.
Operation of Law – Assets that are not jointly owned and do not contain a beneficiary will be subject to Minnesota law on administration and distribution. The law dictates who receives your assets when you die if no plan is in place, and, in many cases, requires a probate.
Trust – A trust designates a successor trustee to handle the assets. The authority of the trustee and the distribution from the trust begin upon your death without the need for a probate or any third-party authority. The trustee collects the assets and distributes them according to the Trust.
Joint Ownership – Joint owners are vested with the ownership of the joint asset by operation of law immediately upon your death, although some filing may be necessary to document their sole ownership after your passing.
Transfer on Death Deed (TODD) – A Transfer on Death Deed operates much like a beneficiary designation for real estate; it is an actual deed recorded with the county recorder, which specifies who will inherit title to the real estate upon your death. It does not transfer any ownership in the property during your life, so the property can be sold and you will continue to receive all of the proceeds.
The Transfer on Death designation can be removed or changed at any time during your lifetime. Upon your passing, those listed to inherit the real estate need only file an Affidavit with the County to obtain full legal title.
Family Entities – Entities, such as partnerships or LLC’s, can assist a family in the joint ownership of property. Certain entities not only create an effective way to manage property by centralizing management but can also have significant tax benefits and liability protection for real estate, such as family cabins or hunting property.
Quit Claim Deed – There may be benefits in some circumstances to gifting property during your lifetime to your heirs by deed. Transferring property during your life in this manner may protect it from future estate taxes or Medical Assistance claims should you need nursing home care. While it is important to understand the consequences of such a transfer, it can be highly effective in protecting assets and continuing your legacy property.
IRA and Retirement Accounts – Qualified, tax-deferred assets, such as IRAs or similar retirement accounts, generally utilize beneficiary designations to determine inheritance upon the owner’s death. Proper designations can provide significant tax advantages for heirs or charities. It is important to understand how these beneficiary designations can impact the accounts you leave to the beneficiaries.