Despite a short legislative session in 2016, Minnesota legislators passed a number of laws affecting estate planning and estate administration, most of which became effective August 1st. The new laws include the enactment of a pet trust statute, updates to Minnesota’s probate laws, and laws clarifying the powers of fiduciaries in handling digital assets.
A pet trust provides a reliable means of setting aside money to care for your pets after you die or in the event of your disability. This is done by giving your pets and a sum of money (or other property) to a person or institution (called a “trustee”). The trustee will arrange for the care of your pets according to your instructions, and will use the money or property in the trust to provide that care. Minnesota is the last state to authorize pet trusts by statute, which became effective May 23, 2016.
A number of updates were made to Minnesota’s probate laws, which became effective August 1st. Among those updates were increasing specific dollar amounts that have not been updated in several years, including the value of property that is exempt from creditors’ claims in certain circumstances, the amount a surviving spouse is entitled to when the deceased spouse did not have a will, and the amount of non-real estate property that may transfer to a person’s beneficiaries without the need for a probate (increasing from $50,000 to $75,000).
The new law also allows the court to correct a person’s will after he or she dies to suit his or her intentions where it is proven there is a mistake in the will, and allows the court to modify the terms of a person’s will to achieve his or her tax planning objectives in certain circumstances.
Finally, under the new probate laws, the court may now order parties to take part in judicial arbitration in guardianship and conservatorship cases. Arbitration is a form of alternative dispute resolution designed to end disputed cases quicker and less expensively. In the past, courts were barred from ordering arbitration in guardianship and conservatorship cases. Arbitration may be a cheaper and more amicable way to resolve select guardianship and conservatorship disputes.
Fiduciary Access to Digital Assets
Minnesota also enacted a law clarifying the rights of fiduciaries to access and manage a person’s digital property. A fiduciary is a person or institution appointed to manage the property of another person, such as a trustee, agent under a power of attorney, conservator, and personal representative of a person’s estate. The new act clarifies that fiduciaries can manage digital property as well as a person’s tangible property (such as personal belongings) and intangible property (such as investments). However, the act restricts the fiduciary’s authority to access a person’s digital communications, such as text messages and emails.
This is only a brief summary of the changes to Minnesota’s estate planning, probate and guardianship and conservatorship laws in 2016. If you have any questions regarding how these changes may affect you, please feel free to contact one of our experienced estate planning attorneys.