Ancillary probate occurs when a decedent owned property outside the state where they lived. For example, if you live in Minnesota but have a cabin in Wisconsin, you might open the doors to an ancillary probate proceeding.

The problems exist because the laws of the state where the property is physically located govern the property. In the example listed above, Minnesota governs the decedent’s estate. However, the cabin in Wisconsin cannot be governed by Minnesota because it is physically located in Wisconsin.

Property owned in another state doesn’t just have to be real property (cabin, beach home, or business), it could also be tangible personal property such such as vehicle or boat if those items are titled in another state.

The best way to handle owning out of state property is proper titling. It’s important to sit down with an experienced estate planning attorney to ensure that your property is correctly titled.

Handling an ancillary probate proceeding can be costly due to multiple court filing fees and additional administration fees. To ensure an ancillary probate proceeding is handling correctly, meet with an experienced probate attorney.

For additional questions on probate or titling, contact Kennedy Law Offices, P.A. Ph: 651-262-2080 or email: clerk@mpkennedylaw.com

Conservatorship, also known as guardianship over the estate, is when a judge appoints a conservator to manage the financial affairs of another due to age or mental incapacity. In Minnesota, once someone has a conservator appointed over their financial affairs, they are referred to by the court as a protected person.

Keep in mind, that a conservator is appointed to manage the finances of an individual. A guardian is appointed to manage the day to day living of an individual. To attend a doctor’s appointment for someone, you likely need proof of guardianship. To go to the bank for someone, you likely need proof of conservatorship.

A typical situation where the court appoints a conservator for someone is when a minor inherits a sum of money. For example, if a grandparent passes away and names their minor grandchild as the beneficiary of their life insurance policy, the company who issues the check will likely ask for proof of conservatorship. The reason companies ask for this proof is because they want to ensure that the money is going to the minor and not to the minor’s parent.

Another situation where conservators are typically appointed are to manage the finances of someone who is elderly and has diminished capacity. Bills and mortgages still needs to paid despite a diagnosis of Alzheimers or dementia. By appointing a conservator, someone can act on the individual’s behalf.

Once someone is appointed a conservator, the work doesn’t end. Within sixty (60) days of appointment, the conservator must submit an inventory to the court. The inventory will be audited. Every year on the anniversary of the conservator’s appointment, the conservator must file an accounting of how all of the money was handled. This accounting will be audited. If the judge approves the audit, the accounting will be allowed. A judge can order that a conservator correct an accounting.

For questions regarding how to file a petition for conservatorship, how to avoid conservatorship, getting accountings waived, and/or what conservatorship does, contact Kennedy Law Offices, P.A. for a free consultation.

Guardianship is necessary when someone is considered an incapacitated person. Someone does not have to be a minor to have a guardian. Guardians are appointed to people of all ages, demographics, and financial backgrounds.

To file for guardianship, a petition must be filed with the court. Guardianship hearings require a mandatory court appearance

There are two parties in a petition: (1) the petitioner and (2) the respondent. The petitioner is the person asking for the guardianship. The respondent is the individual who allegedly needs to be under guardianship. If the court grants the guardianship, the respondent will be referred to as the ward.

Guardianship hearings require a mandatory court apperance. The respondent’s appearance can be waived through a physician.

Objections:

Notice of the guardianship hearing must be provided to anyone who is considered an interested person. An interested person could be a family member, hospital administrator, family friend, ect…  If anyone wants to object they can do so. Objections can be filed into the court record before the hearing or someone can show up to the hearing and object in person.

Letters of Guardianship:

Before the hearing a proposed Order Granting Guardianship and Appointing Guardian should be filed. Proposed Letters of Guardianship should also be filed.  If the judges agrees that a guardian should be appointed and all statutory required documents have been filed, the judge will likely sign the order and letters. Letters is a deceiving term because it refers to a document not letters between parties. The Letters is the document that the guardian can show to banks, doctors, and other entities. Letters are the document with the power.

It’s important to note that each case is unique.

The court may appoint a court visitor to visit the respondent at his or her home before the hearing. If this happens, the court visitor will file a report with the court that details the visit. The court might also require that the proposed guardian have a background report completed and put on file with the court.

Fee Waivers:

A lot of people are concerned about the cost of filing a case with the court. Whether or not someone can afford to file a guardianship petition with the court is based upon the respondent’s income. For example, if the respondent has disabilities that prohibits them from working, the court can make a finding that the county will pay all court filing fees and even attorney’s fees.

For questions about filing a guardianship petition or the fee waiver process, please contact Kennedy Law Offices, P.A. via phone (651-497-6202) or email (clerk@mpkennedylaw.com).

The Internal Revenue Service (“IRS”) has tremendous collection powers.  Creditors must usually get a court judgement before seizing your income or assets.  The IRS, by contrast, can generally seize (“levy”) a taxpayer’s income and property to satisfy debts without court involvement, if it has mailed the required notices to a taxpayer who has not timely set up a collection alternative.[i]  This article talks about how you can avoid or stop an IRS levy with a payment plan.

Before applying for a long-term installment agreement (“IA”), it is important to know how they work.

There are many types of agreements, but they all share features.  First, the IRS will only consider a payment plan if you are in “filing and payment compliance,” usually for the past 6 years.[ii]  “Filing compliance” means you have filed all required returns or have an extension.  To be in “payment compliance,” you must be current on required federal tax deposits or estimated payments.  The IRS wants delinquent taxpayers to get into compliance and to stay there.

Second, an installment agreement will only succeed if you meet its terms.  The terms[iii]include:

  • making every plan payment on time;
  • paying every additional tax on time;
  • providing accurate and complete information in the plan application; and
  • if applicable, providing an updated “collection information statement” on request.

If you do not meet all these conditions, the IRS will send you back into collection.

Third, an installment agreement is only a good option if you can manage monthly payments, but you cannot pay your entire debt at once  However, a payment plan can be hard to secure if your proposed payment amount will not fully pay your tax debts and you own valuable property.  In that situation, you might be able to argue that selling the asset would cause you or your business an economic hardship.  Kennedy Law Offices may be able to help taxpayers in that scenario find appropriate financing to leverage your property’s equity instead of selling it.

Finally, a payment plan does not stop interest and penalties from continuing to accrue, and you must pay an application fee unless you are “low income.”

If you think that an installment agreement is the right fit, then it is time to figure out what your monthly payment amount should be.  This is the technical part because the amount the IRS might accept depends on the plan type (there are 8) and your tax situation.  If you want to apply for a payment plan on your own, the simplest way might be use the IRS online payment agreement application (www.irs.gov/OPA).  However, the online application only works for plans that do not require a collection information statement (Form 433 series).  If an online application does not work, then you should draft a collection information statement and an installment agreement request (Form 9465). Once you have completed the forms, you can mail them to the IRS or call the IRS at 800-829-1040 (individual taxes) or 800-829-4933 (business taxes).

Taxpayers who do not want to deal directly with the IRS have options.  Kennedy Law Offices represents business and personal taxpayers throughout Minnesota.  To schedule an appointment, please call 651-262-2080 or email clerk@mpkennedylaw.com

[i]   The IRS must sometimes get a court order to levy property.  For example, the law generally prohibits the IRS from seizing a primary residence without a court order.  26 USC § 6334(a)(13).  In addition, some income is exempt from IRS levies.  26 USC § 6334.

[ii]More information is available in Internal Revenue Manual (“IRM”) section 5.14.1.4.2.

[iii]The terms are listed in IRM section 5.14.11.3(1).

After someone passes away, their bills are still there, waiting to be paid. Paying these bills can be particularly tricky when an estate is insolvent. An insolvent estate means that there isn’t enough funds in the estate to pay all of the deceased’s debts.

The personal representative, also known as the executor or estate administer, is in charge of paying the decedent’s bills. The personal representative must pay the bills in a particular order that is mandated by Minnesota law. If the personal representative doesn’t pay the bills in this order, he or she could be held personally liable. The personal representative should consult with an experienced probate attorney to ensure they are compliant.

Minnesota Statute 524.3-805 lists the order of priority for what expenses need to be paid.

The order of priority is:

  1. The costs and expenses of administering the estate (this includes court filing fees);
  2. Reasonable funeral expenses;
  3. Debts and taxes under federal law;
  4. Reasonable and necessary medical, hospital, or nursing home expenses that are associated with the deceased’s last illness (this includes medical assistance claims);
  5. Reasonable and necessary medical, hospital, or nursing home expenses that are associated with the deceased’s last year of life;
  6. Debts and taxes under state law; and
  7. All other claims against the estate.

For any questions regarding the decedent’s debts or solvency, please reach out to Kennedy Law Offices for a free consultation. Phone number: 651-262-2080 or email: clerk@mpkennedylaw.com

Our office has attorneys that specialize in tax law as well as a tax specialist who worked for the IRS for over twenty years. We frequently receive frantic phone calls from innocent taxpayers who have been targeted by a scammer impersonating the IRS. We know what to look for to know if it is an IRS scam. Here is a list of common takeaways to help identify when you’re being scammed.

1. The IRS called me and demanded payment over the phone.

If someone calls you and demands that you pay your tax debt over the phone, it’s a scam. These scammers are sophisticated and know how to use scare tactics. They use bogus IRS employee names and badge numbers to sound like a real government official. If you don’t answer the phone, these scammers typically leave an urgent voicemail with callback information and threats. Remember, the IRS communicates with taxpayers via mail through distinct notices. If in doubt, reach out to an experienced tax attorney to verify a notice.

2. It says IRS on the caller ID, it must be them.

IRS Notice
This is a mock up of what an IRS notice looks like.

Sophisticated telephone scammers can reroute or alter the caller ID function to make it look like the IRS is calling, once again the IRS communicates with taxpayers via mail through notices. A mock up notice is included for your reference.

3. Make your payment to _________.

A common misconception is that checks to the IRS should be written to the IRS. Checks should be made out to the United States Treasury. The IRS will never ask for credit or debit card numbers over the phone. Your first notice to pay a delinquent tax bill will be through the mail. The IRS will never demand payment be made through a prepaid debit card, gift care, or even wire transfer.

4. The caller threatened to involve the police if I didn’t pay immediately.

A common IRS scam technique is to instill fear in the caller. The fear tricks the caller into giving away confidential, private information. The IRS will never threaten to bring in local police or other law enforcement to have you arrested for not paying. The IRS will also not threaten to deport an individual or suspend a driver’s license.

5. The IRS is at my doorstep.

In special circumstances, the IRS will visit taxpayers at their home or business due to delinquent taxes, an audit, or pending criminal proceedings. Typically, you will receive notices in the mail prior. If an IRS representative visits you, he or she will provide two forms of official identification. The first is called a pocket commission. The second, is called a HSPD-12 card. This card is a government-wide form of identification for federal employees. You have a right to see this card and verify the information. The representative should provide you with an IRS phone number for verifying the information and the individual’s identity.

When in doubt, call for help.

If you unsure if it’s the IRS demanding payment, please do not hesitate to contact Kennedy Law Offices to verify. Our phone number is: 651-262-2080 and email address is: clerk@mpkennedylaw.com. If you are concerned you are being scammed, reach out to local law enforcement.

 

A personal representative (“PR“), also known as an executor or administrator, is in charge of handling the decedent’s estate. If someone has a will, they most likely named who would they wanted to act as their PR/executor/administrator. Furthermore, a lot of wills also spell out a secondary choice for personal representative if the first pick is unable or unwilling to act. If the decedent didn’t have a will, one of the decedent’s heirs or an interested party will have to petition the court to be appointed. It’s important to keep in mind that just because the decedent named someone as the PR/executor/administrator in their will doesn’t mean there won’t be a need to go through the probate court. To learn more, see our previous post titled: What is Probate?

What’s does the PR/Executor/Administrator do?

First, the PR must determine who the interested parties are so that they can be served notice. Next, the PR must gather information about the decedent’s assets. On top of that, the PR should also gather information about all of the decedent’s debts. This information will be used to supply the court with an inventory. After this, there is typically a hearing to appoint the PR. At this time, a judicial order and letters are issued. The personal representative is responsible for paying the creditors of the decedent. However, the PR must also ensure the decedent’s distributions are followed according to the will. Meet with a probate attorney to learn if all bills need to be paid. The probate process varies but typically takes about a year.

How do I prove that I’m the PR/Executor/Administrator?

A court appointed personal representative receives Letters Testamentary (if the decedent had a will) or Letters of General Administration (if the decedent didn’t have a will). Typically creditors require “certified” Letters which come from the court with a stamp and embossed seal.

Judges or Registrars issue Letters. The process involves filing a petition, serving notices, possibly attending a hearing, and filing an acceptance and oath. Sit down with a probate attorney to learn more about doing probate correctly.

For a free consultation regarding probate, please call 651-262-2080 or email: clerk@mpkennedylaw.com

For a list of common probate definitions, read more here.

Limited liability companies (“LLCs”) are a hybrid entity that offer the tax advantages of a partnership with the liability protections of a corporation. LLCs offer a barrier that allow the owner to protect his/her personal assets in the event of any litigation against the LLC.

For example, if a business is set up a sole proprietorship and is sued, the personal assets of the owner are at risk. On the contrary, if an LLC is sued, the personal assets of the owner are free from potential debt, claims, or litigation.

It’s important to note that the shield from an LLC isn’t absolute. Owners are still personally liable for tortious conduct. If there’s ever a question regarding liability, it’s important to consult with an attorney to ensure you’re protected.

How do taxes for an LLC work?

LLCs use pass-through taxation which means the business’s profits go straight to the owner without being taxed at the corporate level. Taxation occurs on the owner’s federal income tax returns. This is especially important if the business loses money, the owner can reflect this on his/her own return. It’s important to consult with an attorney who specializes in business planning and taxes to ensure the business is properly set up.

How do I set up an LLC?  

First, it’s important to consult with an experienced business planning attorney to ensure that an LLC is the best fit for your business. If it’s agreed that it is, you’ll begin by picking a business name and ensuring the name is available with the Minnesota Secretary of State.

You’ll also need to file documents that spell out who owns the business and how the business will operate. For example, you’ll need to state if the business will be owned by one owner or multiple members. You’ll also need to list a registered agent, which is an individual on file the state who can accept legal papers on behalf of the LLC.

Do you file an LLC and then you’re done?

In Minnesota, you need to file Annual Renewal paperwork every year. If any changes to the business occur, such as changes in owners or members or a new principal address, you’ll need to file these changes with the Secretary of State.

To learn more about seeing if an LLC would be appropriate for your business, please call or email Kennedy Law Offices at 651-262-2080 or clerk@mpkennedylaw.com.

What is Probate?

A common misconception is that if a person has a will, their family will not need to go through the probate court upon that person’s passing. Whether or not someone has a will does not determine the need to go through the probate court. The need is determined by how the person’s assets are held and designated to be distributed at the time of their death.

What does the probate court process look like?
If you need to go through probate, one of the first things that you’ll have to determine is if you’ll be filing for formal probate or informal probate. An experienced probate attorney can held you decide which way is the best way to proceed based on individuals factors that may include: potential creditors, possible disputes, and what assets the decedent had.

Informal probate: You’ll file an application to appoint a personal representative to the probate registrar. The probate registrar has extensive training on probate matters. The registrar will review your application and the will and decide whether or not it’s appropriate to accept your application. If the registrar does not accept your application, you’ll have to proceed through formal probate. There are no court hearings if you file informally. It’s important to keep in mind that a probate registrar will sign the documents appointing you as personal representative, not a judge. An experienced probate attorney can assist you to ensure it’s okay to use a registrar and not a judge.

Formal probate: You’ll file a formal petition to appoint a personal representative to a judge. Some counties have special probate judges, other counties judges operate on a rotation. With formal probate, there is a court hearing that appoints the personal representative. In some counties, it’s mandatory to appear at this hearing, in other counties you do not need to appear unless you anticipate that someone will be objecting to your appointment. If there are no objections, you’ll be appointed as the personal representative and receive certified documents that allow you to access the decedent’s assets.

How can probate court be avoided?
The best way to avoid the need for your loved ones to go through the probate court, is by sitting down with an experienced estate planning attorney. Throughout the estate planning process, an experienced estate planning attorney should locate all of your assets and ensure that they are properly held to avoid the probate court. The attorney can assist you in beneficiary designations as well as drafting a will that is validly executed and nominates a personal representative (also known as an executor) of your estate.

The second way to avoid the probate court is if Minnesota Statute § 524.3-1201 applies to the decedent’s estate. This statute states that if the probate asset that is improperly held is not greater than $75,000 then the need to go through the probate court is avoided. Instead, a blood relative or a person with legal interest in the decedent’s property can fill out an Affidavit for Collection of Personal Property. The Affidavit allows you to recover the improperly held asset.

For any additional questions regarding probate or estate planning, please feel free to reach out via telephone (651-262-2080) or via email (clerk@mpkennedylaw.com).

A carefully crafted estate plan allows you to decide you will receive your assets at your passing. It is important to consult with an estate planning attorney to ensure the documents are properly executed. A common misconception is that if someone has a will, their family won’t need to go through the probate court. Consult with Kennedy Law to create an estate plan specific to your assets, property, and family. 

1. Decide Who Receives Your Assets
Assets that you own in your individual name at the time of your death are subject to probate. Probate can be a time-consuming, complex, and expensive process. Having an estate plan can minimize the expenses and uncertainties of probate by having clear instructions on how your assets should be distributed. Having an estate plan also helps to minimize potential disputes between family members.

2. Name Guardians to Care for Minor Children
If you die without a surviving spouse to care for your minor children (i.e., under age 18) then a guardian and/or conservator will need to be appointed by the probate court to care for your minor children. You can indicate in your estate plan whom you would trust to be the guardian and/or conservator of your minor children.

3. Name the Personal Representative of your Estate
In most instances, if you die with real property and/or assets worth greater than $75,000.00 in your individual name, these assets must be administered under the direction of the probate court before they can go to your beneficiaries. By executing a will, you can specify who you trust to serve as the personal representative of your estate. The personal representative is responsible for paying any debts and expenses, deciding how specific items with be allocated among your beneficiaries, liquidating your assets, and more.

4. Protect your Family’s Inheritance from Creditors and Estate Taxes
An experienced estate planning attorney can help minimize the risks of your assets being subject to creditors and/or more estate taxes than what is legally necessary. If you have potential creditor problems or work in an industry that is subject to litigation, there are several ways to isolate your assets from future creditors. An experienced estate planning attorney can help you navigate these complex questions and help protect your family from uncertainties and unnecessary disputes.

To learn more about estate planning, please call 651-262-2080.