You may have heard the term “laughing heir” used by an estate planning lawyer, the media, or by courts. The legal definition of a “laughing heir” is a distant relative with inheritance rights without a close degree of kinship to the decedent. At common law, laughing heirs described relatives who didn’t bereave a decedent’s death like closer relatives. Many states enacted laughing heir statutes that limit the rights that distant relatives have when a decedent dies intestate or without a will. At common law, if a decedent died intestate, the next living relative was entitled to his inheritance, regardless of the degree of kinship. Thus, at common law, the decedent’s state would find the closest surviving relative of the decedent to pass his inheritance. If the decedent died without a surviving spouse, children or close descendants, laughing heirs could inherit his estate.

To prevent far removed laughing heirs from inheriting a decedent’s assets, some jurisdictions passed a laughing heir statute that limited a laughing heir’s rights to a certain level of kinship. Thus, in these jurisdictions, remote laughing heirs have no inheritance rights. Instead, a decedent’s estate passes or “escheats” to his state. In these cases, states limit the inheritance rights of remote laughing heirs in favor of their escheat laws. In states without laughing heir statutes limiting the inheritance rights of remote relatives, laughing heirs have priority over the state to an intestate decedent’s estate.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

As you may know from reading the previous blog in this series, a power of attorney is a written document that may serve many useful estate planning purposes, depending on your personal or business needs. Your agent or attorney-in-fact has as much power as you delegate or assign. If you want your agent to have specific and limited powers, your attorney can help you draft an agreement specifically delineating those powers.

Some types of powers you may give your agent include the power to make financial decisions and enter into financial transactions with your bank or lender. Your agent may also have the ability to invest on your behalf, the ability to manage your daily financial affairs for your business, or for your personal household needs.

You may consider giving your agent the power to conduct real estate transactions, including the power to sell or purchase real estate on your behalf, the power to pay your property or income taxes and the power to manage your retirement assets. If you are a small business owner, allowing someone else to make business decisions on your behalf or to conduct your professional affairs may make practical sense. You can delegate some of your financial responsibilities or give your agent the power to continue conducting your business affairs if you become ill or mentally incapacitated.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

You can also create a durable power of attorney that becomes effective immediately or becomes effective upon the occurrence or happening of an event. Known as a “springing durable power of attorney,” this type of power of attorney becomes effective only after you become legally incompetent or mentally unable to make decisions. Your attorney can help you decide which type of power of attorney document would effectively address your legal needs.

People create powers of attorney for many different reasons. One reason you may want to consider allowing another person to make legal decisions on your behalf is if you need help with your financial affairs. You can give your agent or attorney-in-fact a financial power of attorney authorizing him to make financial decisions on your behalf. Perhaps you need assistance managing your everyday affairs. You may even allow your attorney-in-fact to make financial business decisions.

The business powers of attorney allows someone else to help you take care of your business responsibilities. By giving another person a power of attorney, you can share your work responsibilities thereby effectively reducing your workload. By discussing your needs, your attorney can draft a power of attorney specifically suited to your personal estate planning needs.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

A power of attorney is a writing that may be a necessary part of your estate planning documents. A power of attorney allows another person to make decisions on your behalf as your attorney-in-fact or legal agent. As the principal giving the power of attorney to another person, you can control what powers your agent has . Your agent may have a general power of attorney or specific power of attorney.

A general power of attorney gives your attorney-in-fact a broad range of authority to make decisions on your behalf. If you give your agent or attorney-in-fact a special power of attorney, your agent has limited authority  and make decisions on your behalf. You should also determine whether your agent should have a durable or ordinary and non-durable power of attorney. A durable power of attorney remains effective upon mental incapacitation. Thus, if you become mentally incapacitated and are knowingly unable to make decisions, your agent has the legal authority to continue making decisions on your behalf. However, if you give your agent an ordinary and non-durable power of attorney, your agent cannot continue making legal decisions on your behalf after your incapacity.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

As discussed in our last few blogs, you must be at least 18 years old and comply with the statutory formalities established by the Minnesota Statutes to create a valid will. You can contact our office to discuss your estate planning goals. We can help you create a valid will pursuant to Minnesota’s probate laws.

To help you avoid future uncertainty regarding the validity of your will, your attorney may recommend the use a self-proving will. A self-proving will can help minimize the opportunity for future attempts to invalidate your will by your beneficiaries or others with legal standing to challenge it. By attaching a self-proving affidavit or acknowledgement, you and your witnesses must affirm under oath that you were of sound mind, at least 18 and possessed the mental capacity to draft a will. A self-proving affidavit gives a probate court proof that you possessed the legal capacity to create a legally binding will without requiring the testimony of both of your witnesses once your estate files your will for probate. A self-proving will is presumptive proof that you were legally and mentally capable of signing your will. Without a self-proving will, a Minnesota probate court will contact your witnesses to establish validity and authenticity.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

According to the 2011 Minnesota Statutes, your will must contain a few basic provisions, including your name, your address, the names of your beneficiaries, the names of your family members and the name of your personal representative or executor, as well as a description of the property you are distributing. If your will refers to any trusts, you must identify them and identify your trustees who are responsible for managing your trusts. You should also incorporate provisions incorporating alternate beneficiaries. This way, if a beneficiary predeceases you, an alternate beneficiary may be able to inherit your asset if he survives you. You should also designate an alternate personal representative or executor to oversee your will if your primary choice is unavailable or unwilling to serve. If you have minor children, you can typically designate a guardian to watch over them and name an alternate guardian.

A personal representative or executor is responsible under Minnesota law to oversee your will. Your personal representative or executor will distribute your property to your heirs and beneficiaries and pay your debts and liabilities to legitimate creditors. Minnesota law places a legal fiduciary duty on your personal representative or executor to act in the best interests of your heirs and creditors. This person is also legally responsible for paying your estate and any inheritance taxes, filing tax returns, notifying prospective creditors of your death and canceling any existing personal accounts.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

Chapters 524 and 525 of the 2011 Minnesota Statutes incorporate the Uniform Probate Code and govern probate proceedings within the state. To create a valid will in Minnesota, you must comply with the statutory formalities. In order for your will to be valid in Minnesota, it must be in writing and you must be at least 18 years old. Two witnesses must be present while you or another person on your behalf signs. Your two witnesses must sign the will in your presences as well. You must also possess the mental capacity and testamentary intent to draft a valid will. In other words, you must be mentally able to create a legal contract and intend for your will to operate as your last will and testament.

If you die without a will, you die as an “intestate” or individual without a written will. Minnesota’s intestacy statutes will govern the disposition of your property. Generally, your assets will first go to your nearest family members, and if you leave a surviving spouse and children, they will first inherit much of your estate. If you were unmarried and leave behind no surviving children, your grandchildren, siblings and parents will inherit your property. After that, more distant relatives will inherit your assets. If you have no heirs at law your assets will go to the state on Minnesota.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

North Dakota law allows testators to change their wills for any reason, including taking into account family or economic changes. To change your will in North Dakota, you must comply with the original legal requirements that were necessary to create your will. You may want to change your will to consider additional children, changing your beneficiary designations or to take a recent divorce or marriage into account. You should also change your will to appoint a new representative or executor or for changes to the federal or state tax laws. If you purchase or sell property that is part of your estate, you will need to make sure you change your will to reflect your real property ownership changes.

You should also change your will to reflect any new personal property that you acquired or sold since you first drafted your will. Under North Dakota law, you may be able to refer to a separate document within your written will to dispose of your personal property. You must sign both your will and the additional personal property list, but you may not use the separate list to bequeath your money.

Another reason you should change your will is to comply with new state laws. If you relocate to another jurisdiction, you will have to make sure that your will complies with your new state’s probate laws. For instance, a will that is valid in North Dakota may not be valid in a different state. However, many jurisdictions may uphold your North Dakota will as long as your executor or representative files it with a local probate court.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

You can change your will in North Dakota by codicil or by creating a new will. Contact our office to discuss which method is better for your individual needs. Although you can change your will intentionally by creating a new will or by changing certain parts of it by codicil, you can revoke your will through certain acts. If you divorce after you created a will, your divorce automatically revokes certain provisions within your will but leaves the remaining provisions intact. In other words, by virtue of getting divorced, the provisions of your will that gave your former spouse property will automatically be revoked, but the remaining provisions will remain in effect. If you remarry, your new spouse will probably receive the dispositions in favor of your previous spouse if you did not refer to your previous spouse by her name.

If you change your will, you should make sure that you comply with North Dakota’s law on revoking it properly and legally. Simply deleting provisions is ineffective. In fact, by deleting provisions in your will by striking them out by hand, you may void your entire will – not just the deleted provisions. Similarly, deleting specific beneficiaries or bequests by using whiteout is generally ineffective and may void your entire will. An improperly revoked or amended will may diminish the value of your estate with unnecessary estate litigation costs.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.

Proper estate planning means understanding your state’s probate laws or code. In North Dakota, this entails understanding the North Dakota Century Code. Because many people are under the mistaken impression that nuncupative or oral wills are valid in North Dakota, they are not engaging in proper estate planning.

Proper estate planning means taking necessary steps today to ensure that your loved ones inherit your property without unnecessary delay and without incurring unnecessary legal fees. This is especially true if you are suffering from a terminal illness. Even if you are currently well, the uncertain nature of a terminal illness requires that you at least contemplate drafting a written will. The same is true if you are one of the brave military soldiers or officers responsible for protecting the rest of our country. Because you may be called upon to serve your country at any time, proper estate planning means taking necessary steps beforehand to ensure that your will covers your loved ones.

Proper estate planning means knowing that nuncupative wills are invalid in North Dakota, regardless of whether you are suffering from a last illness or at war. The North Dakota probate courts will not admit an oral will into probate, regardless of the extenuating conditions that required using a nuncupative or oral will.

Raymond J. German, LTD. is a member of the American Academy of Estate Planning Attorneys.