By John Tetzloff, CLU, FICF, LUTCF – Advanced Case Specialist, Catholic United Financial
I present a financial workshop about once a week throughout the five-state area and have shared with hundreds of Catholics valuable information to help them with their estate plans, charitable giving, funeral expenses and more. During the workshops, I usually receive a variety of questions from both young and old. Here are two of the most common questions I get:
Question #1: “If I have a will, do my heirs have to go through Probate? If so, what does Probate entail?
The purpose of the probate process is to validate and “prove” the last will and testament of the deceased. The first step for the court is to approve and appoint the personal representative named in the will. Then begins the process to identify probate assets and have the personal representative create a public notice of probate hearing to notify creditors of the deceased. Other responsibilities of the personal representative are to gather assets, communicate to heirs, consult professionals regarding payment of expenses and tax reporting, pay expenses and claims, distribute assets and file a petition to close the estate. This process can take up to 18 months or more depending on the estate.
Question #2: “What should I know about Minnesota’s estate tax laws?”
In 2014, Governor Dayton signed a tax bill that has steadily increased the Minnesota estate tax exemption each year that is still in effect, from $2.4 million in 2018, $2.7 million in 2019 and $3 million in 2020. Also of note is Minnesota’s estate law that says any gifts made within three years of a person’s death must be subject to the estate tax. Exclusions for small business owners and farmers are in place, but contact your attorney or tax advisor for more details about your specific situation. An individual could (and can) still pass $1,000,000 through their estate and $1,000,000 through gifting while paying no tax.
Don’t forget that estate taxes vary between each state, which means your state residency affects your estate plan. If moving, retiring or changing your residency status, talk to your attorney or tax advisor about state-specific tax laws.
As you can tell, estate planning can be complex and complicated. Getting easy-to-understand information regarding the estate plan options available is very important and a great start to any well thought-out plan.
John Tetzloff, CLU, FICF, LUTCF, has more than 25 years of experience in the financial industry. He is the Catholic United Financial Advanced Case Specialist and Trainer, and leads financial education workshops every week in parishes and community centers throughout the upper Midwest. Estate planning assistance is offered for free by Catholic United Financial. You can reach John by emailing firstname.lastname@example.org, or connecting on social media: http://facebook.com/CatholicUnitedJohnTetzloff, or http://twitter.com/johntetzloff. Learn more about Catholic United Financial at http://www.catholicunitedfinancial.org.