Introduction to Probate in Minnesota
Probate. We hear about it often, financial planners talk about it, bankers blather about it, and lawyers uh, lawyer about it. In the end, it’s kind of a murky subject that most people don’t know much about. But like a will or trust, it’s something that you may have to deal with, whether you are the personal representative for your mom’s estate or planning your own estate.
What is probate?
Probate is the process of winding up a decedent’s estate. A decedent is a deceased person. Through the process, all debts are paid, and all assets are distributed to the proper beneficiaries. Think of it as asking the court to do what a will says or the court distributing the estate according to statutes if the decedent did not have a will.
During the process, the personal representative of the decedent files an application with the court. Once all debts, taxes, and assets are distributed, the probate will be closed. A probate judge will make determinations based on the will and Minnesota law if there are any disputes.
To gain a better understanding, it’s probably best to define a few terms here.
- Probate Estate or Probate Assets – This is the total of all property of a decedent at the time of their death which is subject to probate. This includes bank accounts, real property, personal property, stocks, and any other properly not jointly owned by a living person.
- Non-probate Assets – These are assets of the decedent assigned to someone or jointly owned assets of the decedent. For example, jointly owned houses or bank accounts, and life insurance policies with a designated beneficiary. Any asset that was not jointly owned will probably be considered a probate asset.
- Personal Representative – This is the administrator or executor of a decedent’s estate. They are the fiduciary of the beneficiaries of the estate. This includes the executor, administrator, successor, personal representative, or a person who performs substantially the same function under Minnesota law.
- Decedent – This is the deceased person.
When is probate necessary?
Probate is necessary based on the types of assets the person owned upon their death. It is usually unnecessary when the decedent jointly owned all of their property or did not own any personal property valued at $75,000 or more. On its own, having a will does not automatically avoid probate in Minnesota.
Why do I hear people talking about avoiding probate?
People want to avoid probate for several reasons, but it mostly comes down to time and money. Many people want to avoid extra hassles for their family upon their passing.
In many instances, probate can be an expensive process. Problems with creditors, debts, multiple wills, contested wills, and hiring attorneys can add significant costs to settling the estate. Typically, the estate assets are used to pay the administration costs of the estate. The costs rise, and the remaining assets shrink; therefore, less money will remain for the beneficiaries. Keeping the cost low means more money available for the family.
Probate can be extremely time-consuming. It’s no exaggeration that it could take months or even years to wind up an estate, depending on the complexity of the matter. Paying debts and collecting assets takes enough time without dealing with court proceedings and administrative challenges.
Probate is also a public process, which means that anyone can find out the exact value of the estate and how its assets were distributed.
Benefits of Probate?
Now that I made probate seem terrible, let me tell you a few beneficial aspects of probate. Remember, this is a court-supervised process; therefore, it can minimize the concerns of beneficiaries. During probate, all assets are disclosed, the court evaluates the will, the property is appraised, costs are outlined, and the court approves all distributions. It also identifies all creditors and shortens the time for any creditors to make claims against the estate. Once the probate is closed and the statutory time has elapsed, no more claims can be made against the estate.
It’s a process that ensures everyone gets what they are entitled to and provides peace of mind.
What to do when someone dies
Okay, so someone has died. What do you do? In most cases, the personal representative starts the probate process by filing in the county court where the person lived at the time of their death. The processes can be formal or informal and must begin within three years after the decedent’s demise.
Informal probate is generally unsupervised. Formal probate is usually reserved for complex estates. At times a judge is needed to help sort things out and make legal determinations. There are formal hearings in a court where probate orders are entered, and the court appoints a personal representative.
In Minnesota, most estates can be informally probated.
Wrapping up Probate in Minnesota
Hopefully, you have learned a bit of probate in Minnesota
If you would like to speak to an attorney about your estate plan or probate, please reach out on our contact page.
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