Whether you’re creating a trust, a will, or a power of attorney, your estate plan will rely upon fiduciaries to carry out your wishes. A fiduciary is someone who owes you, the principal, a legal duty to act in your best interests. Someone who has a fiduciary duty cannot use the position to take advantage of you or otherwise do anything that would harm you.

However, just because that legal duty exists doesn’t mean you can grant fiduciary authority to anyone and be sure that they will do the right thing. When it comes to selecting a fiduciary, here are several tips you might want to consider.

Tip 1. Don’t feel compelled to choose family.

A lot of people who create estate plans choose a close family member to act as their agent, executor, or to serve as the trustee of a trust. While this is often a wise choice, you shouldn’t feel obligated to choose family members for these roles. Trusted friends and professional advisors can all act as your fiduciary. In some situations, such as when you hire an attorney or an accountant, it’s often preferable to have someone who is not related to you.

Tip 2. Consider the practical limitations.

Fiduciaries should be people you trust, but they should also be people who are able to meet their duties. Don’t choose fiduciaries who are located too far away from you if the position requires them to act locally. Also, be sure to choose someone who recognizes his or her own limitations and who will seek appropriate advice when necessary.

You can learn a lot more about different fiduciaries involved in estate planning at one of our free estate planning seminars. The next seminars will be on July 23, 24th, and 25th in Grand Forks, North Dakota and Thief River Falls, Minnesota. Contact our office for details and registration information.

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

As part of the probate process, a personal representative has to find out exactly what a decedent owned. This inventorying process can often take a long time, and it includes determining how much each item is worth. Probate appraisals are something that are often required in order for the personal representative to complete the inventory process. Here’s what you need to know.

What is an appraisal?

An appraisal is simply a determination of fair market value. For many items, such as real estate, valuable collectibles, antiques, and other items that don’t have a readily apparent value, the personal representative will often have to hire an appraiser. Appraisers are people with special knowledge who evaluate property and give it a value based on their expertise.

When is an appraisal necessary?

Any property that isn’t easily valued might need an appraisal. For example, the value of a bank account is easily determined because there is a specific amount of money in the account at any time. On the other hand, a valuable piece of artwork that the decedent purchased years ago might need to be appraised by an expert because its value isn’t something an average person can determine.

How long does a personal representative have to complete the appraisal?

In general, the personal representative has either six or nine months to complete the inventory and appraisal process in Minnesota. The deadline for filing the inventory is six months after appointment to the position by the court, or nine months after the decedent died, whichever is longer.

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

It used to be that reaching the age 65 was when the vast majority of people expected to retire. Now, according to a new Gallup survey, more and more people are saying they expect to work past 65.

Released in June, the survey questioned more than 2000 adults, including over 630 retirees. About 37% of those questioned say they expect to, or did, keep working past age 65. That’s up significantly from previous years. In 1995, for example, only about 14% of workers said they expected to work past the age of 65.

About 26% of the people surveyed said that they intended to retire at age 65, while another 26% say they hope to retire before then. The number of people seeking to retire early has also dropped significantly since 1995, when almost half of those surveyed said that they wanted to retire before 65.

While the results likely reflect a decrease in retirement savings, many people report that they intend to keep working past 65 because they enjoy it. 40% of those polled who say they plan on working past 65 say they will do so because they wish to, while 35% say it is because they have to.

Additionally, 61% of those who plan on working past 65 say they will only work part-time, while 15% say they will remain employed full-time. Only about 19% of workers say that they will choose to stop working entirely once they reach retirement age.

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

Probate

A self-proving affidavit is a document that you can create that accompanies your will. When you create a will in North Dakota or Minnesota you have to create a written document that states your wishes about how you want your property to be distributed after you die. You must sign this document in the presence of two adult witnesses, and then have those witnesses sign it as well.

After you die, a probate court will have to look at the will and make sure it meets all state legal requirements. Part of this process includes having the witnesses testify that they saw you sign your will. This can often be very difficult, especially if the witnesses have moved or died since they signed the document.

To avoid such difficulties you can have the witnesses sign affidavits at the time they signed the will. The affidavit is a sworn document that the court will accept as testimony when determining if the will is valid.

Optional

You are never obligated to create a last will and testament, nor are your witnesses obligated to sign a self-proving affidavit. However, creating this document makes it much easier for the personal representative to handle the probate process. It also makes it easier on the witnesses.

Signing Ceremony

The easiest way to create a will and a self-proving affidavit is to assemble the witnesses in one place and have them witness you sign the will. They can then sign the self-proving affidavit in front of a licensed notary who will identify them and notarize the affidavit.

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

Even with all the media coverage about the debate over health care in 2010, the passing of the Patient Protection and Affordable Care Act, and the subsequent Supreme Court decision on the law, millions of Americans not only remain unaware that Obamacare is law, but they also don’t understand the changes that the law will soon bring about.

A recent survey published by the Kaiser Family Foundation, a nonprofit healthcare policy research organization, shows that about 42% of Americans either believe the Affordable Care Act is not a law or are unsure of its legal status.

12% of the survey participants believe that Congress has repealed the law after it originally passed it. Another 7% say they believe that the Supreme Court had overturned the law as unconstitutional, while the remaining 23% said they didn’t know what the law’s status is.

While numerous attempts have been made in congress to overturn the Affordable Care Act, those attempts have  been unsuccessful and it still remains federal law.  In 2012, when the Supreme Court issued its decision on challenges to the law, states obtained the ability to choose whether or not to implement the law’s Medicaid expansion provisions because the court held those provisions were unconstitutional. However, the court left the rest of the law untouched, and it did not overturn it.

The law has already brought about significant changes, and beginning in 2014 some of the most important provisions will take effect. You can learn more about these at healthcare.gov.

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

Powers of attorney play a key role in many estate plans. Though these documents are very flexible and are able to give you peace of mind in knowing that your important affairs will be managed by someone you select, you also need to know how to end the powers. Here is what you need to know about stopping a power of attorney.

Voluntary Termination

As a principal (a person who makes a power of attorney), you maintain the ability to terminate the agent’s authority at any time and for any reason. As long as you are of sound mind you can terminate a POA when you choose, but must do so by telling the agent.

Involuntary Termination

Powers of attorney can also end when you become incapacitated. If you should lose your ability to make choices and can no longer choose to terminate the power of attorney, the powers automatically terminate.

However, this only applies to non-durable powers. If you’ve created a durable power of attorney, the agent retains the ability to act even if you become incapable of revoking the powers.

Agent Self-Termination

You cannot force anyone to become your agent, and agents can choose to give up their powers. However, an agent must act in the principal’s best interests. So, if they want to stop representing you they must end the principal-agent relationship without damaging your interests.

Death

All powers of attorney cease when the principal dies. You can give someone the ability to represent your estate by appointing an executor in your will, but your agent can only represent your interests while you are alive.

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

Every estate planning lawyer in Minnesota will tell you that all adults need an estate plan. While a lot of people believe that estate plans are only necessary for people with a lot of wealth, the reality is that everyone has choices that they can only make by creating an appropriate plan. While every adult should have an estate plan, you’ll definitely need to begin your planning efforts as soon as possible if you are a part of any of the following groups.

Parents with Young Children

Whether you are a married couple or a single parent, you will have to create an estate plan that addresses the possibility that you will die and your young children will be left without a parent. You can create an estate plan that chooses a guardian who will care for your children after you are gone.

Business Owners

Transferring a business to new owners or to other family members after you die or decide to step away is a complicated process. An estate plan will allow for a smooth transition whether you choose to bow out and retire, or if something should happen to you before then.

People With Health Issues

If you’re suffering from a chronic or worsening disease that could leave you incapacitated you absolutely need to create an estate plan as soon as possible. Your ability to make medical choices depends on your ability to make rational decisions, and once you lose that ability you can no longer choose your own level of care.

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

People tend to ignore or downplay the effects of aging, especially when it isn’t a present concern. But if you have recently reached retirement age or have an elderly family member, you will want to consider speaking to an elder law attorney in your area even if you don’t require his or her assistance at the moment. Many people who need an elder law lawyer ask for advice only after it is too late, and some common situations that many people have to deal with can be greatly simplified if you take action early.

Loss of Capacity

Everyone loses physical and cognitive abilities as they age. While the loss of ability is quite often not enough to require seeking legal advice, the potential for significant loss of capacity exists even if you have yet to experience it. If, for example, if an elderly family member begins suffering from dementia or Alzheimer’s disease, it may be too late to create a power of attorney. In such a situation you may be forced to go to court to ask for a guardianship order. Acting early allows you to create safety nets that will help in the event a loss of capacity become significant, and will help you save on court costs and attorney fees.

Long-Term Care

Government data shows that about 7 out of 10 people will require some type of long-term care assistance once they become old. Taking the time to prepare ahead will allow you many more options in your long-term care choices than might be available if you wait until the last moment.

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

When you create an advance directive and name someone to act as your health care agent, the question of who to select for this important position inevitably arises. While many people appoint their spouses or a close family member, you may want to take a little more time to think about the issue instead of immediately naming the person closest to you. There are several factors you will need to measure when choosing the right person for the job.

Objective

Your health care agent, sometimes known as a health care proxy or attorney-in-fact for health care, will need to be able to make decisions in light of both your desires and the medical facts. While your agent doesn’t have to be a medical professional, the person must be able to evaluate the opinions and advice given to him or her by your doctors and make a decision.

Firm

Your health care agent must also be able to take into consideration the opinions and concerns of your closest family members and friends without being persuaded to choose an action contrary to your desires. Your agent needs to be able to stand up and say what his or her decision is without giving too much consideration to whether or not other family members will agree.

Location

Practically speaking, it’s better to appoint an agent who lives near you. If a medical emergency arises, your agent should be close-by so your doctors have little difficulty in contacting him or her.

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

A Florida woman whose husband died about 16 months ago has been struggling ever since to try to get money out of the Wells Fargo savings account that her husband had in his name. Julia Bolena has had little luck in gaining access to the funds because of a number of problems.

Before her husband had died, the couple had apparently created a living trust and transferred some of their property to it so as to eliminate the necessity of having to go through probate. Unfortunately, it appears that Mr. Bolena never transferred the savings account he had with Wells Fargo Bank to the trust.

Though the couple had a checking account with Wells Fargo that was in both of their names, the savings account was only Mr. Bolena’s name. Because Mr. Bolena did not list his wife as a joint account holder, nor did he transfer the account to the trust, Mrs. Bolena has been unable to access the money.

To make matters worse, when Mrs. Bolena contacted a Florida probate clerk to ask what she could do to access the funds, the clerk told her that it would cost her $250 for the clerk’s office to issue her a letter that would direct Wells Fargo Bank to allow her access. The account in question only has a little over $270 in its, making acquiring the letter nearly pointless. To add insult to injury, Wells Fargo is charging a small fee to the account funds every month, further depleting them.

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