In Minnesota, being served with a Summons and Complaint is the beginning of a lawsuit in many cases.  It is very important to know that in general you have 20 days to provide an Answer.  The Answer needs to be individually responsive to each and every paragraph of the Complaint including the “facts”.  If you fail to respond to the Summons and Complaint within the time limit, it is likely that you have waived your right to Answer and therefore you agree with the allegations brought against you in the Complaint.  This can be a harsh result.  Don’t take that chance!

If you have been served with a Summons and Complaint, this is definitely one time when you need to call an attorney right away and not wait until 19 days after you have been served like I have seen numerous times.  You specifically should locate an attorney who is experienced in litigation (civil and commercial lawsuits).  Many attorneys do little or no work in litigation but it is in your best interest to understand the rules surrounding when and how to respond to a Summons and Complaint so find someone who has familiarity with how to respond.  There are many options in terms of your rights that you might not have considered and this can be a tricky area of the law to go it alone or with little information.

Here is a list of 5 common assets generally not controlled by your WILL:

1. Jointly-Owned Real Estate

2. Life Insurance

3. 401Ks, IRAs, Retirement Accounts

4. Jointly-Owned Businesses

5. Investment Accounts

Most people own any or all of the above.  Estate Planning is a lot more than just cranking out a WILL and calling it a day.  A good estate planning attorney helps you strategize your whole estate including assets/property not distributed by a WILL and making sur that it all makes sense to you.

Beneficiary Designation > Will

1.  Be very clear on the terms and make sure that there is a MUTUAL exchange of promises.

2.  Make sure that the parties agree to mutually release all claims.  In other words, the parties can’t come back and sue each other later on with respect to the disputed issues.

3.  Clarify that there is no admission of liability on the part of either party.

4.  Be sure to have it stated that the agreement has been entered into knowingly and voluntarily without duress, undue influence or misrepresentation.

5.  Clarify that this agreement is the entire understanding and that no modification of this agreement may happen without a mutually signed writing.

If you have questions about how this process works, please contact me.  I have worked with numerous clients on preparing settlement agreements in a wide variety of contexts.  Settlement agreements are an excellent (yet surprisingly simple) way to bring finality to an on-going dispute so that you can have peace of mind.

For the landlord, there is ONE rule that you must remember: You must refund the entire security deposit within 21 DAYS after the tenancy ends OR give the former tenant a sufficient WRITTEN explanation as to why part or all of the security deposit is not being returned.

This is the 21 DAY RULE.

Here are a few recommended tips for the landlord:

1.  Make sure to send the letter to the last known address even if it is the address where the tenant just moved out.

2.  Send the letter by certified mail and get a return receipt.

3.  If you return any or all of the security deposit, it would be preferred if you sent it back in the form of a money order or cashier’s check rather than a check (identity theft).

4.  If you are not going to return all of the security deposit, enclose an accounting statement to demonstrate why you are entitled to retain the security deposit.

5.  Don’t forget to add the appropriate interest to the security deposit (currently 1% per year).

6.  Talk with a knowledgeable landlord-tenant law attorney if you have questions.  A lot of tenants know the rules better than their landlords and you as a landlord can incur civil penalties for mishandling this process.

Remember our rule of thumb: everything you own in life is either labeled as PROBATE or NONPROBATE.  If you can move everything to the NONPROBATE side, your estate in all likelihood will avoid probate.  Your heirs and relatives will probably thank you for it!

Here are 6 easy ways to move assets from PROBATE to NONPROBATE:

1. Joint Ownership

In MN, you can move real estate or certain investment accounts into joint ownership.  This means that the surviving joint account holder or joint tenant is entitled to automatically receive your share of the asset.

2. Transfer on Death Deed – TODD

MN allows you to create beneficiary designations for your real estate.  There is a specific but simple process you must follow.  However, if you do it right, you can make it easy to move real estate to your heirs after you die.

3. Gifting

A lifetime gifting strategy allows you to start reducing the probate assets you might own.

4. Living or Revocable Trust

Every week, someone asks me about a trust.  A trust is an excellent tool to retitle probate assets and have them placed into a trust managed by a trustee of your choosing.

5. Insurance

Yes, insurance is a great way to pass an inheritance to heirs.  As long as you have valid beneficiary designations on the life insurance policy, you are good to go!

6. Beneficiary Designations and Payable on Death Designations

If you own bank accounts, investment accounts, 401Ks, IRAs, simply make sure that your beneficiary designations are current and up-to-date.  So many times people don’t check these and if the beneficiary is already deceased or there is none, then that item will be labeled as PROBATE.

First, remember this rule: ALL ASSETS AND PROPERTY YOU OWN DURING YOUR LIFETIME ARE CLASSIFIED AS EITHER “PROBATE” OR “NONPROBATE”.  Everything from life insurance to the house you own is either one or the other!

If you want to have your estate avoid probate, then it is recommended that you move each of your assets and property from being labeled as PROBATE over to NONPROBATE.  Avoiding probate allows your heirs to access their inheritance much quicker and substantially reduces the likelihood that your estate will be tied up in court.

My experience is that most people don’t know that probate avoidance is available to everyone.  It doesn’t matter what you own or how much or how little you own.  Understanding what tools are available to you is the key to setting up your estate to avoid probate.  In my next blog post, I will provide tips on how to arrange your assets and property outside of probate by reclassifying them as NONPROBATE.

Luke Enno is an estate planning attorney at Enno Law in Maple Grove, MN.

What does “ESTATE” mean?

Do I have an “ESTATE”?

As an estate planning attorney, it is surprising to me how many people ask me what an “estate” is.  There is a misconception that an “estate” is something for the very wealthy like millionaires or billionaires or that an “estate” means that you own real estate.

In the simplest terms, your “estate” is EVERYTHING you own.  Now if you don’t own anything, then you don’t have an estate.  If you own something, then you do have an estate.  99.99% of people have an estate.

So even the poorest homeless man has an estate even if it is just a dollar to his name and a bottle of whiskey in his hand.

It naturally follows that “estate planning” is the process that anyone with an estate does to transfer their assets and property to the person of their choosing.  Without an estate plan, the alternative is to rely on the default statutes under the law which, in many cases, differ substantially from the wishes of the person who died.

#1 – Guardianship provisions allow you to nominate who you believe is the person or persons best suited to raise your children.  While there are no guarantees the person(s) you nominate will be approved, your selections are given substantial preference when evaluating who is the best fit.

#2 – You have the right to nominate co-guardians.  But it would be strongly advised to select co-guardians that share the same residence (such as a husband and wife) and to be clear whether one or the other co-guardian has the sole right to serve as guardian if the other cannot due to death or illness.

#3 – I strongly encourage you to select a substitute guardian in the event your first choice is not able to serve (death, disability or otherwise).  You are welcome to nominate as many back-ups as you wish.

#4 – You are not required to tell the nominated guardian in advance that you are selecting him/her.  It can be a surprise to them if you wish.  But it would be a good idea to let them know in advance and get their approval.

#5 – The person you select to be guardian does not need to sign anything acknowledging that you have selected him/her.  After you pass away, if there is a need for a guardian, that person will take care of going through the process of being appointed as a guardian at that time.

Guardianship provisions are an easy way to communicate your  wishes and preferences and are strongly encouraged as a means to ensure your children’s well-being until they are adults.

In Minnesota, the process of selecting a guardian for your children is much easier than you might expect.  In almost all cases, guardianship provisions are a part of your Will. 

If you do not have a Will, you are not required to create a Will in order to select a guardian.  However, it is strongly advised that any document which you execute naming a guardian for your children be signed/dated/notarized and witnessed by two non-related individuals such as friends, co-workers or neighbors.  I say this because it is critical that any document you prepare be enforceable in a court of law and a judge will closely scrutinize any document to ensure it is valid.

In my next post, I am going to offer some simple tips to keep in mind regarding the guardianship process.