North Dakota Estate Planning Considerations
North Dakota is a Common Law State, which means the rules governing the ownership, division, and inheritance of income and property acquired by a husband or wife during their marriage holds that subject to various qualifications, each spouse owns and has complete control over his or her income and property.
Last Will and Testament
The minimum age of a person competent to make a will is 18. The number of witnesses necessary to execute a will is two.
Uniform Transfers to Minors Act (UTMA)
Custodial property may be invested in or used to pay premiums on (1) a policy on the minor’s life if the minor’s estate is the sole beneficiary, or (2) a policy on a third party in whom the child has an insurable interest if the minor or the custodian is the irrevocable beneficiary.
The custodial arrangement terminates when:
- The minor child reaches age 21 for custodial transfers made by irrevocable lifetime gift, will, trust, or exercise of a power of appointment. This can be conveyed earlier at age 18 if noted in the trust terms.
- The minor child reaches age 18 for other custodial transfers.
- The minor child dies.
Dying without a Last Will, the North Dakota Laws of Intestacy.
The estate goes to the surviving spouse, as follows:
- If there are no surviving descendants or parents, —100% of the estate
- If all surviving descendants are also descendants of the spouse and no other descendant of the spouse survives—100%
- If one or both parents survive, but there are no surviving descendants—$300,000 plus 75% of the balance of the estate
- If all surviving descendants are also descendants of the spouse and the spouse has one or more descendants who are not descendants of the decedent—$225,000 plus 50% of the balance of the estate
- If one or more of the decedent’s surviving descendants are not descendants of the spouse—$150,000 plus 50% of the balance of the estate
If there is no surviving spouse, or if a portion of the estate does not go to the spouse:
- 100% to surviving descendants by representation (see NDCC §30.1‐09.1‐09(3))
If there is no surviving spouse or descendant:
- 100% to surviving parent or parents equally
If there is no surviving spouse, descendant, or parent:
- 100% to the descendants of the decedent’s parents (or the descendants of either parent) by representation (see NDCC §30.1‐09.1‐09(3))
If none of the above:
- Intestacy laws outline further distribution steps to grandparents’ level, then deceased spouses, and their descendants. See NDCC §30.1‐04‐03 paragraphs 5. and 6.
- If no legally described recipient can be found, estate assets go to the state of North Dakota.
North Dakota follows the Revised Uniform Fiduciary Access to Digital Assets Act to ensure that testators can retain control of their digital property and plan for its ultimate disposition.
North Dakota does not impose an inheritance tax.
Credit Estate Tax
North Dakota imposes an estate tax equal to the maximum credit allowed under the federal tax code for paid state estate and inheritance taxes under IRC Sec. 2011. However, the current federal tax code does not permit a credit for paid state estate or inheritance taxes. Therefore, there is no credit estate tax in effect at this time.
Generation-Skipping Transfer Tax (GST Tax)
North Dakota does not impose a GST tax.
North Dakota does not impose a gift tax.