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Important Details to Note about a Minnesota Revocable Living Trust
Creating a Minnesota living trust is essential and can play a significant role in your estate planning. Contrary to what you must have heard, a living trust is much better than a will because it helps your family bypass the probate process when distributing your estate to your beneficiaries. With a living trust, you transfer your assets to a trust you can manage while alive and assign a trustee to manage it after your death.
What is a Minnesota Living Trust?
A revocable living trust is created by the grantor – the owner of the trust assets. In the revocable living trust in Minnesota, the grantor names the trustee who manages and distributes the assets to the legal beneficiaries. It is worth noting that a living trust has terms outlining how the assets will be distributed after the grantor's death, and the trustee must adhere to them.
Please note that there is a big difference between a will and a living trust. Assets put on will go through probate before they are distributed to the legal beneficiaries. On the other hand, with a Minnesota revocable living trust, assets don't go through probate and are distributed quickly to the beneficiaries. That means when you leave a living trust, you will save your family a lot of stress, time, and money likely to be spent throughout the probate process.
In Minnesota, there are revocable and irrevocable living trusts. If you create a Minnesota revocable living trust, you can change or cancel it during your lifetime. And even if you pass away, your assets will be distributed as per the terms of the trust. On the other hand, an irrevocable living trust cannot be altered or revoked after signing. But it is essential to note that whether you have a revocable or irrevocable living trust and disinherited your spouse, the spouse can claim a certain percentage of the estate after your death.
Do You Need a Living Trust in Minnesota?
There are many benefits of a revocable living trust in Minnesota. First, the trust document helps your beneficiaries avoid the probate process, which is lengthy and expensive. With a living trust, your family will get their inheritance almost immediately. Additionally, the assets in the trust are only passed to the beneficiaries according to your wishes and terms.
Compared to a will, a living trust offers privacy. Note that a will becomes a public record during the probate process. A revocable living trust does not need to be approved in court or made a public record to be legal.
However, Minnesota has adopted the Uniform Probate Code that streamlines the probate process allowing your beneficiaries to bypass the probate process or have a simpler process. Probably the most complex part is for your beneficiaries to have a sworn statement or affidavit to claim your estate if it's valued at $75,000 or less. Alternatively, you can use the Summary Proceedings, where the court determines that no asset in your estate is subject to the creditor's claims. With these options, you will not need to make a living trust.
Does a Living Trust Protect You from Estate Taxes in Minnesota?
Typically, a Minnesota revocable living trust doesn't protect you from estate tax. You must pay estate taxes if your trust assets are more than $3 million. If the trust assets are valued above $12.06 million (For deaths in 2022), you will have to pay federal estate taxes to the government and upto $24.12 million exemption in case of joint assets of a couple.
How to Make a Living Trust in Minnesota?
Creating a living trust in Minnesota may seem challenging, but it is easier than you think. You must complete the above given form and sign it before a notary. You should add the assets, beneficiaries, and terms of distributing the assets to the beneficiaries.
If you want to create a revocable living trust, Forms.legal got you covered. Please fill in to complete your revocable living trust form, download it, and sign it before a notary public.