Jack brings more than a decade of experience advising clients on estate planning and probate and trust administration. He enjoys helping clients gain peace of mind by planning for their future needs and guiding family wealth to the next generation.

Regarded as a leader by his colleagues, Jack co-leads a study group of estate planning attorneys and enjoys mentoring law students and new attorneys. He is often asked to present to his peers on probate and estate planning topics.

Jack earned his J.D. at the University of St. Thomas School of Law, where he represented clients as a certified student attorney in the nationally renowned Elder Law Clinic. Prior to law school, he studied history at the University of Minnesota.

The Power List is a feature that examines the power brokers who lead and influence the Minnesota legal community, with a focus on those "whose mere presence on a case signifies the stakes, who have influenced the direction of the law, whose leadership in the community is pervasive, and whose respect within the bar is undeniable."

To read the feature, go to: Minnesota Lawyer, "The Power List: Susan Markey" (subscription required).

Susan represents clients in general corporate, taxation, and nonprofit matters. She draws from a diverse background in government, accounting, and law to serve as a holistic business advisor, and strongly believes that tax and corporate advice should be both easy to understand and practical.

Over the past 18 months, Susan has served as lead counsel on several significant M&A transactions, including:

• The sale of one of the nation's largest data analytics firm to a leading digital consulting firm.
• The sale of Dean's Home Services, a leading provider of plumbing, drain and sewer, and water heater services to over 10,000 customers, to Redwood Services, a home services investment firm. The transaction was complex, structured to allow Dean's to retain significant minority ownership and continue to operate and manage the business, while Redwood handles the operational, strategic, and financial functions.
• The sale of a top sports camera company to a private equity firm. The deal was valued at approximately $350 million and required multiple stages of restructuring to ensure certain tax benefits. Because the seller remained a 50% owner post-sale, the transaction required significant negotiation of protective provisions.

Susan is ranked as a top Minnesota lawyer for corporate/M&A law in Chambers USA.

A buy-sell agreement is an agreement that outlines what happens to an owner’s share in an entity when that owner desires to transfer shares upon their death or departure. Buy-sell agreements are frequently used by closely held corporations, LLCs, and partnerships to facilitate transitions in ownership. Connelly has far-reaching consequences for any company with a buy-sell agreement funded by life insurance.

A Tale of Two Brothers

Two brothers—Michael and Thomas Connelly—were the only shareholders in a small building supply corporation. Because they wanted the company to stay in the family upon either of their deaths, they entered into a buy-sell agreement requiring the company to buy the shares of the first brother to die if the surviving brother declined to purchase them. The company obtained a life insurance policy on each brother to make sure it would have enough money to satisfy this requirement. 

When Michael died, Thomas elected not to purchase Michael’s shares, triggering the company’s purchase obligation. The company used the $3 million in life insurance proceeds it received as a result of Michael’s death to buy the shares. As executor of Michael’s estate, Thomas was required to file a federal estate tax return detailing the value of Michael’s assets, including his shares in the company. Thomas engaged a third party who determined that Michael’s shares in the company were worth $3 million; however, the third party excluded the life insurance proceeds when determining the fair market value of the company. Thomas reported the $3 million value on the estate tax return, relying on the Eleventh Circuit’s decision in Estate of Blount, which held that insurance proceeds should not be included in the value of a corporation when they are “offset by an obligation to pay those proceeds to the estate in a stock buyout,” 428 F.3d 1338, 1345.  

The IRS disagreed with Thomas’s reasoning. During its audit of Michael’s estate, the IRS contended that the total valuation of the company should include the life insurance proceeds—thereby making the total value of the company $6.86 million, rather than $3.86 million, when Michael died. Accordingly, the IRS said that Michael’s estate should have paid higher taxes based on the higher valuation of Michael’s stock. The estate paid the taxes and then sued the IRS for a refund. 

Supreme Court: Life Insurance Counts in Estate Tax Valuation

The case made it all the way to the Supreme Court. The dispute focused on the inclusion of the life insurance proceeds as part of the company’s total fair market value for purposes of the estate tax. The Supreme Court sided with the IRS in a unanimous decision, holding that life insurance proceeds that will be used to redeem a decedent’s shares must be counted when calculating the value of those shares for estate tax purposes. The court emphasized that the point of the estate tax is to assess the value of Michael’s shares at the time he died—even if the value would be drastically different a day later, once the life insurance proceeds were paid out.

What It Means for Your Business

A better understanding of the consequences of their buy-sell agreement may have prevented years of litigation for the Connelly family. There were alternate options available. The brothers could have purchased life insurance policies on each other, rather than having the company take out the life insurance. This structure, known as a cross-purchase agreement, would have placed the life insurance proceeds outside the company’s assets, potentially reducing the estate tax burden. (It is important to note that a cross-purchase agreement may have had different tax consequences for the brothers personally, but would have avoided a situation where the company experienced a stark increase in valuation.)

Connelly affects any company—including corporations, LLCs, and partnerships—with a buy-sell agreement funded by life insurance. Companies utilizing buy-sell agreements funded by life insurance should promptly review these agreements to ensure the best possible arrangement is in place to accomplish their owners’ goals and minimize tax liability.

We Can Help

Each estate plan is unique to the individual’s circumstances and wishes. If you own shares in a closely held company, it is imperative that you fully understand the tax implications of both your business succession plan and estate plan. Maslon’s experienced Estate Planning and Corporate groups can work together to help you navigate the complexities of estate planning for closely held businesses to ensure your wishes are met and tax liabilities are minimized.

Named for the late Eugene P. Daly Jr., the award acknowledges those who have gone above and beyond in devoting time, energy, and talent to the section and the estate planning and probate practice in general. The award was presented June 10 by the MSBA's Probate, Trusts and Estates Section.

"I am so very honored to receive this award," Mike said. "It is a privilege to be associated with, and participate in, an organization such as the Probate and Trust Section that is continually striving to find ways to help us improve ourselves as attorneys and practitioners, and to become good community servants. The Section helps us to better our profession as a whole."

Mike's legal practice focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. He is a fellow of The American College of Trust and Estate Counsel and is ranked Band 1 in Minnesota, the highest ranking, for Private Wealth Law in the 2018-2023 editions of the Chambers High Net Worth (HNW) guide.

Mike has served on the Probate, Trusts and Estates Section council for 12 years, including as chair in 2022. He has also been a member of the Legislative Committee since 2008, and served on the special subcommittee that wrote the Minnesota Trust Code, which was enacted in 2015. That year, Mike helped shepherd the bill through the legislature, testifying before several house and senate committees.

In addition, Mike is a frequent speaker at continuing legal education seminars and has served as an adjunct professor at both Hamline and Mitchell Hamline School of Law in St. Paul and the University of Minnesota Law School in Minneapolis.

The Gene Daly Award is not given every year. Previous winners have included Maslon Partner Susan Link, who received it in 2012.

June 10:

• Maslon Board Member and Estate Planning Partner Susan Link moderates the "2024 Probate Panel: Reviewing and Resolving the Latest Issues in Probate Administration," with Paralegal Tina M. Johnson serving on the panel.
• Maslon Board Member and Partner Julian Zebot, chair of Maslon's Trust & Estate Litigation Group, co-presents a session titled, "What to Do with a Bad Personal Representative or Trustee: Assessing the Tools in Your Legal Toolbox."

June 11:

• Trust & Estate Group Chair Michael Sampson moderates "2024 Large Estates Panel: Planning in Uncertain Economic Times."

For more information or to register, go to Minnesota CLE: 2024 Probate and Trust Law Section Conference.

Mike focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. He helps his clients focus on what it is they want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, he works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk.

Susan, a member of the firm's board of directors, practices in the areas of estate planning, probate, and trust administration. She works closely with families to plan the disposition of their assets, both during lifetime and at death, and to accomplish the optimal estate and gift tax planning for clients through wills, trusts, and other instruments. Susan routinely drafts estate plans that include estate tax and generation-skipping tax planning, in addition to drafting and implementing irrevocable trusts, charitable trusts, qualified personal residence trusts, minors' trusts, antenuptial agreements, and postnuptial agreements. She is regularly involved in the analysis and issues of lifetime gifting programs, estate tax planning, and generation-skipping issues.

Julian, a board member and chair of Maslon's Trust & Estate Litigation Group, focuses his legal practice on probate, fiduciary, and trust litigation as well as business and commercial litigation. His probate, fiduciary, and trust litigation practice has involved many different types of contested estate, trust, probate, and elder law matters, including will/trust contests (including claims of undue influence and diminished capacity), construction/interpretation disputes, accounting actions, breach of fiduciary duty claims, fiduciary removal actions, trust instruction proceedings, financial elder abuse claims, and creditor claims against estates. He has also developed a niche practice representing and counseling parties involved in complicated multijurisdictional trust litigation, often involving parallel lawsuits in different states, and has familiarity with associated trust situs, venue, and jurisdictional issues.

Tina is a paralegal with more than two decades of experience managing probate and trust administrations, maintaining trust account ledgers and annual trust accountings, and preparing fiduciary income tax, gift tax, and estate tax returns. She also supports attorneys with clients' long term care planning needs and annual accountings for guardianships, conservatorships, and special/supplemental needs trusts.

Mike, chair of Maslon's Estate Planning Group, will present a session May 6 titled "Planning the Exit: Succession in the Family-Held Business." Also on May 6, Katie, a Corporate & Securities Group partner, teams up with a co-presenter for "Using Earnouts and Rollover Equity to Get the M&A Deal Done."

For more information or to register, go to Minnesota CLE: 2024 Business Law Institute.

Mike focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. He helps his clients focus on what it is they want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, he works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk.

Katie manages and negotiates complex mergers & acquisitions, corporate reorganizations, buy-sell agreements, and business succession agreements. Her expertise also includes negotiating, drafting, and revising a variety of commercial contracts, with particular focus on technology-related agreements.

We published a legal alert on Feb. 28, 2023, discussing Swanson v. Wolf, 986 N.W.2d 217 (Minn. App. 2023). To summarize the issue, the Minnesota Trust Code provides for two types of jurisdiction in trust proceedings: 1) in rem jurisdiction, which refers to the court's authority over the trust's assets, and 2) in personam jurisdiction, which refers to the court's authority over a person interested in the trust.

As provided for in Minn. Stat. § 501C.0203, either form of jurisdiction can be invoked by the specific manner in which notice of an initial petition is provided. An in rem petition is served by publishing in a paper of record, putting the world on notice of the proceeding. An in personam petition is served by personally serving the people interested in the trust. A separate statute, Minn. Stat. § 501C.0202, enumerates the courts' powers in trust proceedings. These powers include the ability to remove a trustee. In Swanson, the Court of Appeals determined that because the ability to remove a trustee was a power "binding on individuals," then the court must have in personam jurisdiction over the trustee to exercise that power.

As we noted last year, Swanson called into question which jurisdiction was necessary for the other items of judicial relief under section 501C.0202 of the Minnesota Trust Code. For example, if a court needed in personam jurisdiction to remove a trustee, does a court need in personam jurisdiction to appoint a new trustee? If a trustee sold a trust's real property, which jurisdiction is necessary for the court to approve that action? The asset would be part of the res of the trust but the court would be asked to confirm an individual's action regarding that asset. Is that in rem? Is that in personam?

By amending the Minnesota Trust Code, lawmakers have answered those questions. Specifically, section 501C.0202 now makes clear that the enumerated powers of a court may be exercised "whether filed by petition under the district court's in rem or in personam jurisdiction …." The legislation also clarifies that an order issued by a court with in rem jurisdiction is binding "upon the trust estate and all interested persons …."

In other words, lawmakers have clarified that a court's powers in a trust proceeding are not limited by whether the court operates under in rem or in personam jurisdiction. With this clarification, the only consideration between in rem or in personam jurisdiction is how the filing party wishes to serve its petition and who will be bound by the court's order.

We Can Help

Maslon's Trust & Estate Litigation and Estate Planning attorneys welcome your questions about trusts, trustees, and legal precedent in this often complex area of law.

For more information or to register, go to Minnesota CLE: Navigating the Tax Maze with Drafting Wills and Trust Agreements Deskbook Forms.

Mike focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. He helps his clients focus on what it is they really want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, he works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk.

Only 11 other Minnesota private wealth law attorneys achieved the Band 1 ranking.

Susan serves on the firm's board of directors. Michael leads Maslon's Estate Planning Group.

The Chambers guide ranks the top lawyers and law firms for international private wealth law based on extensive interviews and research to assess technical legal ability, client service, depth of team, commercial vision and business understanding, diligence, value, and other qualities most valued by clients.

To view Maslon's full Chambers High Net Worth rankings, go to: 2023 Chambers High Net Worth.

About Chambers and Partners
Since 1969, London-based Chambers and Partners has published world-famous guides to the legal profession. A team of over 200 researchers conducts continuous, in-depth telephone research for all guides.

For information or to register, go to Minnesota CLE: 2023 ABCs of Probate Practice in Minnesota.

Susan practices in the areas of estate planning, probate, and trust administration. She works closely with families to plan the disposition of their assets, both during lifetime and at death, and to accomplish the optimal estate and gift tax planning for clients through wills, trusts, and other instruments. Susan routinely drafts estate plans that include estate tax and generation-skipping tax planning, in addition to drafting and implementing irrevocable trusts, charitable trusts, qualified personal residence trusts, minors' trusts, antenuptial agreements, and postnuptial agreements. She is regularly involved in the analysis and issues of lifetime gifting programs, estate tax planning, and generation-skipping issues.

Rachel is an Estate Planning Group partner specializing in comprehensive estate planning, probate and trust administration, guardianships and conservatorships, and business and farm succession planning. Informed by her childhood in a rural environment, Rachel works with individuals, farm families, and business owners to design estate and succession plans that meet their individual needs and goals, while keeping the farm operation, business, and family structure in mind.

Susan, Rachel, and Morgan co-author Chapter 2: Opening an Estate, Inventory, and Disclaimers. Michael co-authors Chapter 5: Taxation Issues. And Julian co-authors Chapter 9: Professional Responsibility and Chapter 11: Review of Recommended Orders, Post-Trial Motions, and Appeals in Estate Litigation.

The Deskbook comes with a companion eFormbook that includes more than 260 downloadable and editable probate forms.

For more information or to order, go to: Minnesota CLE – Minnesota Estate Administration Deskbook, 6th Edition.

Susan, a Maslon board member, has edited the Estate Administration Deskbook for two decades. She practices in the areas of estate planning, probate, and trust administration, working closely with families to plan the disposition of their assets, both during lifetime and at death, and to accomplish the optimal estate and gift tax planning for clients through wills, trusts, and other instruments. Susan routinely drafts estate plans that include estate tax and generation-skipping tax planning, in addition to drafting and implementing irrevocable trusts, charitable trusts, qualified personal residence trusts, minors' trusts, antenuptial agreements, and postnuptial agreements. She is recognized as a Notable Practitioner in Minnesota for Private Wealth Law in Chambers High Net Worth (HNW) guide (2018-2022) and is a member of The American College of Trust and Estate Counsel.

Michael, chair of Maslon’s Estate Planning Group, focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. He helps his clients focus on what it is they really want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, Michael works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk. Michael is a fellow of The American College of Trust and Estate Counsel and has also been recognized as a Notable Practitioner in Minnesota for Private Wealth Law in the 2018-2022 editions of the Chambers High Net Worth (HNW) guide.

Julian, a Maslon board member, chair of Maslon’s Trust & Estate Litigation Practice Group, and a fellow in The American College of Trust and Estate Counsel, advises clients on probate, fiduciary, and trust litigation as well as business and commercial litigation. His practice has involved many different types of contested estate, trust, probate, and elder law matters, including will/trust contests (including claims of undue influence and diminished capacity), construction/interpretation disputes, accounting actions, breach of fiduciary duty claims, fiduciary removal actions, trust instruction proceedings, financial elder abuse claims, and creditor claims against estates.

Rachel specializes in comprehensive estate planning, probate and trust administration, guardianships and conservatorships, and business and farm succession planning. Informed by her childhood in a rural environment, Rachel works with individuals, farm families, and business owners to design estate and succession plans that meet their individual needs and goals, while keeping the farm operation, business, and family structure in mind.

Among his many points of advisement featured, Michael shares, "Sometimes people take control too far by not including enough flexibility for the beneficiaries. As a result, what seems like a reasonable provision in a trust today might make no sense some years down the road."

To read the full article, go to: Construction Magazine Network, "Protecting Valuable Assets from Outside Threats."

Michael's legal practice focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. Michael helps his clients focus on what it is they really want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, Michael works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk.

It is this practical focus on the real-life impact of wealth transfer planning that distinguishes Michael's approach from that of the typical estate planning attorney. Beyond preparing legal documents, he also serves as his clients' wealth coach, personal CFO, professional pest, and skeptic-for-hire. Michael also provides his clients with access to his deep network of contacts, which often leads to solutions for many of life's little problems, even if they're completely unrelated to what you would normally think of as "estate planning."

Susan practices in the areas of estate planning, probate, and trust administration. She works closely with families to plan the disposition of their assets, both during lifetime and at death, and to accomplish the optimal estate and gift tax planning for clients through wills, trusts, and other instruments. Susan routinely drafts estate plans that include estate tax and generation-skipping tax planning, in addition to drafting and implementing irrevocable trusts, charitable trusts, qualified personal residence trusts, minors' trusts, antenuptial agreements, and postnuptial agreements. She is regularly involved in the analysis and issues of lifetime gifting programs, estate tax planning, and generation-skipping issues.

Cindy assists attorneys with all aspects of estate and trust administration, including preparation of court documents, accountings, estate tax returns, fiduciary income tax returns, and distribution of assets.

For more information, go to: The ABCs of Probate Practice in Minnesota.

On the morning of December 8, Michael will serve on a panel titled "The Minnesota Taxable Estate: Drafting with the End in Mind," in which panelists will discuss pros and cons of each plan for a client scenario. Panelists will walk through utilizing various plans from the Drafting Wills and Trust Agreements Deskbook and will consider steps needed to be taken by the drafter to ensure the plan works the way the client wishes.

Later that afternoon, Michael will serve on a panel session titled "The Minnesota Taxable Estate: The End is Just the Beginning: Administering the Plan," in which panelists will discuss administering a hypothetical estate scenario at the first death and at the second death under various Wills or Trusts used from the Drafting Wills and Trust Agreements Deskbook.

On December 16, Cindy will serve on a panel session titled "The Blended Family: The End is Just the Beginning – Administering the Plan," in which panelists will discuss administering another hypothetical estate scenario involving a blended family at the first death and at the second death under various Wills or Trusts used from the Drafting Wills and Trust Agreements Deskbook. Panelists will offer pointers on administering each type of plan and share what can be done when the plan does not go accordingly to plan.

To learn more or to register for the courses, go to:

• The Minnesota Taxable Estate: Drafting with the End in Mind
• The Minnesota Taxable Estate: The End is Just the Beginning: Administering the Plan
• The Blended Family: The End is Just the Beginning – Administering the Plan

Michael's legal practice focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. Michael helps his clients focus on what it is they really want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, Michael works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk.

Michael is a Fellow of The American College of Trust and Estate Counsel and has also been recognized as a Notable Practitioner in Minnesota for Private Wealth Law in the 2018-2020 editions of the Chambers High Net Worth (HNW) guide. He is a frequent speaker at continuing legal education seminars and has served as an adjunct professor at Mitchell Hamline School of Law in St. Paul. Michael serves as the chair of Maslon's Estate Planning Group and is also very active in the Minnesota State Bar Association, currently serving as Treasurer of the Probate and Trust Law Section Council and as a past chair of the Section's Legislation Committee.

Cindy is a senior paralegal in the areas of estate and trust administration. Cindy assists attorneys with all aspects of estate and trust administration, including preparation of court documents, accountings, estate tax returns, fiduciary income tax returns, and distribution of assets.

National "Best Law Firm" Ranking:

• Appellate Practice [Tier 3]
• Commercial Litigation [Tier 3]
• Litigation — Banking & Finance [Tier 3]
• Securities Regulation [Tier 3]

Regional/Metro: Minneapolis "Best Law Firm" Ranking:

• Appellate Practice [Tier 1]
• Bet-the-Company Litigation [Tier 1]
• Commercial Litigation [Tier 1]
• Litigation—Banking & Finance [Tier 1]
• Product Liability Litigation—Defendants [Tier 1]
• Securities Regulation [Tier 1]
• Trust & Estates Law [Tier 1]
• Employment Law — Management [Tier 2]
• Litigation—Antitrust [Tier 2]
• Litigation—Intellectual Property [Tier 2]
• Litigation—Labor & Employment [Tier 2]
• Securities / Capital Markets Law [ Tier 2]
• Employee Benefits (ERISA) Law [Tier 3]
• Franchise Law [Tier 3]
• Litigation—Securities [Tier 3]

To view the full rankings, go to: U.S. News - Best Lawyers® 2021 "Best Law Firms" Rankings.

U.S. News Media Group and Best Lawyers® rank more than 15,000 firms nationally. The rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field, and review of additional information provided by law firms as part of the formal submission process.

1.  There will be a "Reading of the Will."

Movies, television, and books often portray scenes involving a "reading of the Will," where, upon someone's death, an attorney assembles all of the heirs to read the terms of the document (complete with dramatic pauses, gasps, and ultimately, tears). Historically, this practice was carried out due to low literacy rates and unreliable mail delivery. Today, there is no requirement in any state for such a reading and they rarely, if ever, happen. With beneficiaries scattered across the globe, high literacy rates and access to mail, email, and fax, the "reading of the Will" is a thing of the past.

That said, consistent communication with beneficiaries is often key to avoiding disputes upon death. Given that probated Wills are public record, providing a copy of the Will to beneficiaries and other interested parties is generally considered good practice. Further, under Minnesota law, a personal representative (also known as an executor) must observe certain standards of care in dealing with the estate. A personal representative must act as expeditiously and efficiently as is reasonable in administering the estate. If you are concerned about acting as a personal representative generally or about the acting personal representative of an estate of which you are a beneficiary, please reach out to one of our estate planning attorneys for guidance.

2.  If I die without a Will, the State will get everything.

There are many misconceptions about what happens if you die without a Will. The legal term is that you die "intestate," meaning you didn't have a Will before you died or your Will does not meet the requirements of the laws in your state. For example, some states allow handwritten Wills, while others do not. If you die "intestate," the intestacy provisions under state law dictate how your property will pass upon your death. Who inherits your property will vary depending on what your family looks like at the time of your death. If a person is married, their spouse may or may not inherit everything. For example, if someone has a blended family, their estate will be divided between their spouse and their children (in amounts and percentages that they may not have chosen had they planned it themselves). If someone is single, everything will generally pass to their children, if they have any. Keep in mind, however, that minor children cannot inherit assets. The Court will have to appoint someone to take care of those assets until the children reach a certain age. This process is called a conservatorship and can be arduous and expensive.

Having a Will allows you to decide who receives your assets, how much they receive, and for parents of minor children, who will take custody of their kids (it is worth expressly noting that a Will is the only place that you can name a guardian for your children). By having a Will, you may be able to avoid the potentially adverse consequences of dying intestate.

3.  If I have a Will, my estate will avoid probate.

While having a Will provides clarity as to who gets your property and who will take custody of your children upon your death, the one thing that having a Will does NOT do is avoid probate. To the contrary, a Will GETS probated! This is perhaps one of the bigger misconceptions. So, what is probate? Probate is the legal process of administering a deceased person's estate, resolving all claims, and distributing the deceased person's probate property according to their Will or the intestacy statutes. If there is a Will, the Court determines its validity and appoints someone to act as the "personal representative" or "executor" to carry out the wishes set forth in the Will (a Will generally nominates someone to serve in that role). If there is no Will, the Court still appoints a personal representative, but because there is no Will to tell the Court who ought to act as such, sometimes a dispute will arise as to who should be appointed.

Of course, this all begs the question of whether you should try to avoid probate. A quick Google search will imply that probate is the absolute worst thing in the world and that it should be avoided at all costs. In reality, while the probate process has a bad reputation, it does not have to be as complicated, expensive, or arduous as it sounds. That said, probate processes in some states are, in and of themselves, arduous and/or expensive, and in those states, avoiding probate may be advisable. In other states where the probate process is relatively straight forward (like Minnesota), planning to avoid probate may not actually save you money in the long run and could add unnecessary complexity (and cost) to your planning now. Whether it makes sense to try to avoid probate depends on your unique circumstances. If you have questions, please reach out to one of our estate planning attorneys.

4.  Probate will tie up your estate for years!

Horror stories about probate in which a decedent's estate is "caught up in probate for years" often have very little to do with the probate process itself and more to do with: (a) whether the decedent had a Will; (b) what the decedent owned; and (c) the decedent's family situation. For example, if a person who owned several rental properties, including property in multiple states, died without a Will, leaving 7 kids, 5 of whom do not get along, chances are that the process will be long and arduous. In that situation, however, the probate process itself is not to blame. The kids might disagree over who gets to act as personal representative or the estate might have to evict tenants living in the decedent's properties, which will delay the process significantly. All of this takes time and money.

One thing is for certain—having a Will can absolutely streamline the probate process. In the fifth misconception below, you will learn about one of the ways to avoid probate. If you have questions about whether it would be advisable to plan to avoid probate, please contact one of our estate planning attorneys.

5.  Having a Revocable/Living Trust is the best way to avoid probate.

The most common way to avoid probate is to have a Revocable/Living Trust. A Revocable Trust is an alternative to a Will. Any assets transferred to the Trust during a person's lifetime will not require a probate proceeding. "Transferred to the Trust," however, are the key words here, and also why this is listed as a misconception. The mere existence of a Revocable Trust will not avoid probate. In order for a Revocable Trust to be effective as a probate avoidance tool, you must "fund" the Trust by transferring all of your assets to it. That means executing a deed to your home and re-titling your bank accounts, brokerage accounts, cars, any business assets, etc. Funding your Trust can be an onerous task.

If you do not fund the Trust, then your estate will still end up going through probate. Even worse is when a person goes through the cost and effort to create a Trust and fund it, but then purchases a new home, for example, and neglects to put the new home in the Trust. In that case, the Trust would be administered upon death, but a probate would also need be initiated for that single asset, thereby thwarting the decedent's efforts of avoiding probate. Unfortunately, in our experience, a fully and properly funded Revocable Trust is rare, which means that most of the time, a probate ends up being necessary anyway.

If done properly, a fully funded Revocable Trust can be a powerful tool with a number of advantages over a Will. Administering a Revocable Trust (as opposed to probating an estate) often ends up being slightly less work for the decedent's successors, provides quicker access to money upon the decedent's death, can offer additional privacy with respect to the decedent's assets, and can reduce the likelihood of legal challenges to the estate.

How might having a Revocable Trust reduce legal challenges upon a person's death? First, when a probate is initiated, all "interested parties" must receive notice of the proceeding. Under Minnesota law, an "interested person" includes a person's heirs, devisees, children, spouses, creditors, beneficiaries, and any others having a property right in or claim against the estate of a decedent, ward, or protected person which may be affected by the proceeding. That means that even if a person is explicitly disinherited under a decedent's Will, he or she still may receive notice of the probate proceeding and be provided with an opportunity to object. On the other hand, only beneficiaries of a Trust are entitled to receive notice of the Trust and its contents. Second, because a Revocable Trust administration is generally performed without Court involvement or oversight, any legal challenge would need to be affirmatively initiated. On the other hand, a probate proceeding that is already initiated can provide a disgruntled beneficiary or family member an easy route to challenge the Will.

We Can Help

If you have questions about whether it makes sense to utilize a Will or a Revocable Trust, or other related topics, please contact an attorney in Maslon's Estate Planning Group.

Susan represents clients in general corporate, taxation, and nonprofit matters. She draws from a diverse background in government, accounting, and law to serve as a holistic business advisor, and strongly believes that tax and corporate advice should be both easy to understand and practical. Susan assists clients with a wide array of tax issues, including tax controversies, audits, appeals, planning, and structuring, as well as researching tax law, drafting legal appeals, and memoranda. In addition to her tax practice, Susan counsels clients on mergers and acquisitions, business formation, joint ventures, and general corporate matters, while leveraging her tax background to help guide them toward profitable solutions.

Susan is dedicated to advancing the profession as well as informing her clients on key issues in her area of practice. She writes and presents regularly on tax-related topics. Most recently, she co-authored an article for Thomson Reuters' Practical Law, titled "Sales and Use Tax for Remote Sellers: Minnesota," that serves as a Q&A guide to remote sellers' exposure to sales and use tax in Minnesota after the U.S. Supreme Court's decision in South Dakota v. Wayfair, Inc.

For more information or to register, go to: Sage, "PPP and Forgiveness Updates."

Chambers High Net Worth reports that "Maslon's estate planning team advises high net worth clients on a comprehensive range of matters including charitable planning, trust litigation and tax planning." Sources state that Maslon is a "great" firm with a "very sophisticated practice."

The 2020 edition of Chambers High Net Worth recognizes Susan Link and Michael Sampson with the following notes:

• Chambers states that Susan Link "advises high net worth clients on estate planning, probate and trust administration." Sources stated, "She is a fantastic attorney, she knows how to communicate with her clients and is very practical." Another comments that Susan is "a really solid lawyer - clients love her, she is great."
• Chambers shares that Michael Sampson "advises on a range of issues including estate planning and administration, charitable planning and business succession planning. He also advises on trust administration and tax matters."

To view Maslon's full Chambers High Net Worth rankings, go to: 2020 Chambers High Net Worth.

About Chambers and Partners
Since 1969, London-based Chambers and Partners has published world-famous guides to the legal profession. A team of over 200 researchers conducts continuous, in-depth telephone research for all guides.

Michael’s legal practice focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. Michael helps his clients focus on what it is they really want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, Michael works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk.

Michael is a Fellow of The American College of Trust and Estate Counsel and has also been recognized as a Notable Practitioner in Minnesota for Private Wealth Law in the 2018-2019 editions of the Chambers High Net Worth (HNW) guide. He is a frequent speaker at continuing legal education seminars and has served as an adjunct professor at Mitchell Hamline School of Law in St. Paul. Michael serves as the chair of Maslon's Estate Planning Group and is also very active in the Minnesota State Bar Association, currently serving as Treasurer of the Probate and Trust Law Section Council and as a past chair of the Section's Legislation Committee.

For more information or to register, go to: Minnesota State Bar Association, Serving Estate Planning Clients in the Midst of COVID-19.

*This presentation will be recorded and made available for viewing on-demand.

To receive future COVID-19-related legal alerts, please email us.

TOPICS:

• Most Recent
• Corporate
• Mergers & Acquisitions
• Labor & Employment
• Product Liability Litigation
• Construction
• Insurance Coverage
• Cybersecurity
• Estate Planning
• Supporting the Effort
   

Most Recent:

• January 14, 2022 — Supreme Court Halts OSHA's COVID-19 Vaccine and Testing Mandate
• December 20, 2021 — OSHA's COVID-19 Vaccine and Testing Mandate Is Back in Business After Sixth Circuit Court of Appeals Lifts Stay
• November 8, 2021  — Fifth Circuit Court of Appeals Stays OSHA's COVID-19 Vaccine and Testing Mandate: Next Steps for Employers
• November 5, 2021 — What Employers Need to Know About OSHA's New Vaccine and Testing Requirements
• November 1, 2021 — 5 New Legal Risks for Product Manufacturers During COVID-19
• September 10, 2021 — Path Out of the Pandemic: Biden Administration Will Require Employers with 100+ Employees to Mandate COVID-19 Vaccination or Weekly Testing
• August 24, 2021 — Updated COVID-19 Guidance from OSHA and the CDC: What It Means for Your Business

Corporate:

• February 16, 2022 — Can You Spot a Liar? Key Factors for Determining Credibility in Internal Investigations
• January 8, 2021 — New SBA Guidance Released: Interim Final Rules on the Revived Paycheck Protection Program
• December 28, 2020 — Coronavirus Relief Under the Consolidated Appropriations Act, 2021
• June 5, 2020 — CARES Act PPP Reform: Paycheck Protection Program Flexibility Act of 2020
• April 27, 2020 — New SBA Guidance Released: PPP Loan Certification Requirements for Good Faith
• April 16, 2020 — CARES Act: Paycheck Protection Program Loan Forgiveness
• April 10, 2020 — CARES Act: The Main Street Lending Program Offers Relief for Small and Mid-Sized Businesses
• April 2, 2020 — CARES Act: Paycheck Protection Program - Proactive Steps to Apply
• March 30, 2020 — COVID-19: Key Business Resources Under the CARES Act
• March 26, 2020 — COVID-19: Key Business Considerations for Minnesota Emergency Executive Order 20-20
• March 20, 2020 — COVID-19 Business Update: Tax Deadline and Proposed CARES Act
• March 16, 2020 — COVID-19: Force Majeure Contract Clauses
   

Mergers & Acquisitions:

• April 18, 2020 — Video: COVID-19 Business Owner's Survival Guide—M&A After COVID-19 (29:00), Presented by Terri Krivosha
   

Labor & Employment:

• February 16, 2022 — Can You Spot a Liar? Key Factors for Determining Credibility in Internal Investigations
• January 14, 2022 — Supreme Court Halts OSHA's COVID-19 Vaccine and Testing Mandate
• December 20, 2021 — OSHA's COVID-19 Vaccine and Testing Mandate Is Back in Business After Sixth Circuit Court of Appeals Lifts Stay
• November 8, 2021  — Fifth Circuit Court of Appeals Stays OSHA's COVID-19 Vaccine and Testing Mandate: Next Steps for Employers
• November 5, 2021 — What Employers Need to Know About OSHA's New Vaccine and Testing Requirements
• November 1, 2021 — 5 New Legal Risks for Product Manufacturers During COVID-19
• September 10, 2021 — Path Out of the Pandemic: Biden Administration Will Require Employers with 100+ Employees to Mandate COVID-19 Vaccination or Weekly Testing
• August 24, 2021 — Updated COVID-19 Guidance from OSHA and the CDC: What It Means for Your Business
• May 24, 2021 — What Employers Need to Know Now That the CDC Has Relaxed Mask Recommendations for Those Who Are Fully Vaccinated
• March 24, 2021 — The American Rescue Plan Act of 2021—Key Implications for Employers
• December 30, 2020 — New Year, New Rules: Employer Implications of the New COVID-19 Relief Legislation
• December 22, 2020 — Employers: EEOC Releases New Vaccine Guidelines to Address Five Key Concerns
• September 14, 2020 — FFCRA Update: Department of Labor Revises Regulations, Largely Rejects SDNY Court Ruling
• August 5, 2020 — Key FFCRA Regulations Vacated by Federal Court, Dramatically Expand FFCRA Leave Eligibility
• July 24, 2020 — #MaskUpMN: Key Employer Re

The new law may provide you and your family with tax-savings opportunities. However, not all of the changes are favorable, and there may be steps you could take to minimize their impact.

KEY PROVISIONS OF THE SECURE ACT AFFECTING INDIVIDUALS:

Repeal of the Maximum Age for Traditional IRA Contributions

Before 2020, traditional IRA contributions were not allowed once the individual attained age 70½. Starting in 2020, the new rules allow an individual of any age to make contributions to a traditional IRA, as long as the individual has earned income from wages or self-employment.

Required Minimum Distribution Age Raised to 72

Before 2020, retirement plan participants and IRA owners were generally required to begin taking required minimum distributions from their plan by April 1 following the year in which they turned age 70½. The age requirement was first applied in the early 1960s and had not been adjusted to account for increases in life expectancy.

For individuals who attain age 70½ after December 31, 2019, the age at which they must begin taking distributions from their retirement plan or IRA is increased from 70½ to 72.

Partial Elimination of Stretch IRAs

For deaths of plan participants or IRA owners occurring before 2020, beneficiaries were generally allowed to stretch out the tax-deferral advantages of the plan or IRA by taking distributions over the beneficiary's life or life expectancy—sometimes referred to as a "stretch IRA."

However, for deaths of plan participants or IRA owners occurring after 2019 (later for some participants in collectively bargained plans and governmental plans), distributions to most non-spouse beneficiaries are generally required to be completed within ten years following the plan participant's or IRA owner's death—the "stretching" strategy is no longer allowed.

Exceptions to the 10-year rule are allowed for distributions to:

1. the surviving spouse of the participant/owner;
2. a child of the participant/owner who has not reached majority; 
3. a chronically ill individual; and
4. any other individual who is not more than 10 years younger than the participant/owner.

Those beneficiaries who qualify under one of these exceptions may generally still take their distributions over their life expectancy.

Many estate plans will be able to take advantage of one or both of the first two exceptions. Note that, under the second exception, the 10-year rule is suspended while the child is a minor. When the child reaches the age of majority, the account must be distributed to the beneficiary within 10 years from that date.

In addition, a designated beneficiary under the fourth exception may still withdraw the assets from the retirement account over their own life expectancy. This might allow the participant/owner's siblings, for example, to take withdrawals over more than 10 years as long as they are not more than 10 years younger than the participant/owner.

We Can Help

If you have questions about how the SECURE Act might affect your planning, please give your Maslon attorney a call. We are happy to help.

Jen develops comprehensive estate plans for her clients, with particular skill working with high net worth clients to address their unique concerns and advise on the best strategies to achieve their wealth management and legacy goals. From advising on wills, taxes, or succession planning to developing and administering trusts aimed at tax minimalization, probate avoidance, and asset protection, Jen carefully guides her clients through all considerations in the process.

Further enhancing her work, Jen has conducted analysis of federal and state estate and income tax consequences and prepared pleadings and represented clients in proceedings related to trust administration, estate administration, guardianship, conservatorship, and litigation. She also serves as a board member for Twin Cities Estate Planning Council (TCEPC), which promotes multi-disciplinary education, understanding, and cooperation among professionals who are involved in estate planning to help render the highest possible service to the public.

National "Best Law Firm" Ranking:

Appellate Practice [Tier 3]

Commercial Litigation [Tier 3]

Litigation — Banking & Finance [Tier 3]

Regional/Metro: Minneapolis "Best Law Firm" Ranking:

Appellate Practice [Tier 1]

Bet-the-Company Litigation [Tier 1]

Commercial Litigation [Tier 1]

Litigation—Labor & Employment [Tier 1]

Product Liability Litigation—Defendants [Tier 1]

Trust & Estates Law [Tier 1]

Employee Benefits (ERISA) Law [Tier 2]

Employment Law — Management [Tier 2]

Litigation—Banking & Finance [Tier 2]

Securities / Capital Markets Law [ Tier 2]

Securities Regulation [Tier 2]

Litigation—Intellectual Property [Tier 3]

Litigation—Securities [Tier 3]

To view the full rankings, go to: U.S. News - Best Lawyers® "Best Law Firms" rankings for 2020.

U.S. News Media Group and Best Lawyers rank more than 15,000 firms. The 2020 "Best Law Firms" covers 202 practice areas across all 50 states and the District of Columbia. The rankings are based on a rigorous evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field, and review of additional information provided by law firms as part of the formal submission process. Achieving a high ranking is a special distinction that signals a unique combination of professional excellence and breadth of expertise.

Michael's legal practice focuses on high-end estate and tax planning, estate and trust administration, charitable planning, and business succession planning. Michael helps his clients focus on what it is they really want to accomplish with their wealth. After assisting his clients in identifying their specific wealth planning goals, Michael works with them and their other professional advisors to develop and implement wealth transfer strategies that are consistent not only with their goals, but also with their cash flow needs and tolerance for risk.

It is this practical focus on the real-life impact of wealth transfer planning that distinguishes Michael's approach from that of the typical estate planning attorney. Beyond preparing legal documents, he also serves as his clients' wealth coach, personal CFO, professional pest, and skeptic-for-hire. Michael also provides his clients with access to his deep network of contacts, which often leads to solutions for many of life's little problems, even if they're completely unrelated to what you would normally think of as "estate planning."

For more information or to register, go to: Minnesota CLE, 2019 Strategic Solutions for Solo and Small Law Firms.