If you’re preparing to create an estate plan, you might think it’s all pretty straightforward. Simply write down a list of names and you’re done. Once you’re gone, those named heirs will receive their designated items, no muss, no fuss.
Though possible, things seldom go so smoothly. Instead, life intervenes and can disrupt your supposedly straightforward estate plan. The best way to counter this uncertainty is to be prepared by crafting a detailed plan. Rather than work in generalities, you and your estate planning attorney will sit down and come up with a plan that’s detailed and designed to anticipate trouble.
One aspect of such a detailed plan that’s worth spending time on concerns the ways in which property can be divided. Unsurprisingly, there’s more to it than just writing down a list of names. To help make things simpler, let’s consider a scenario in which a woman has created an estate plan and would like to divide her estate between her three children: two sons and a daughter. One son had only one child, her other son had two children and the daughter had none.
Now let’s imagine that before she passed away, both of her sons predecease her, leaving only her daughter and three grandchildren. To learn more about how her remaining assets might be divided, keep reading.
Estate Planning in Minnesota | Per capita
Per capita means “by total head count”. In the estate planning world, this means that all living beneficiaries should share distribution equally. However, if a beneficiary is deceased, then his or her share won’t be created and will instead pass to the remaining living beneficiaries. Under a per capita approach to property distribution, the daughter would inherit 100% of her mother’s estate. The sons, who are both dead, would receive nothing and neither would their children.
Minnesota Property Division | Per stirpes
Per stirpes means “by class”. In the context of Minnesota estate planning, this means that beneficiaries who are closest to the person distributing the property will receive equal shares. If, however, a member of that group is deceased, then that person’s beneficiaries will divide the share that their parent would have received. In this case, that means that the daughter would get one-third of her mother’s estate. The only child grandson would receive one-third of the estate and the other son’s two children would each receive one-sixth of the estate (the son’s share divided in half).
Per capita, at each generation
This third approach occurs in cases where heirs of the same generation receive the same amount of money. Again, let’s take a look at an example. In this case, the daughter receives one-third of the estate and the three grandchildren would equally divide the remaining two-thirds of the estate, meaning each would receive a 2/9 share. Under this option, the only child gets less than under a per stirpes approach, while the two children receive slightly more.
Minnesota Estate Planning Lawyer
In the end, there isn’t a right or a wrong here, it’s whatever works best for you. It’s crucial to understand that you have the power to decide what happens to your property. If one of the options discussed above seems particularly good or particularly bad, simply take the time to work with an attorney to spell out what you want (or don’t want). An experienced Minnesota estate planning lawyer can help walk you through the complicated process of establishing a workable estate plan. For more information on estate planning in Minnesota, along with a variety of other topics, contact Joseph M. Flanders of Flanders Law Firm at (612) 424-0398.
