There are few things as traumatic as dealing with the death of a loved one, and oftentimes the pain experienced is exacerbated by the legal issues involved in settling their affairs. Dealing with insurance companies, locating and understanding a Will, and figuring out what and where the decedent’s assets are can be an undue stress to families already dealing with the difficulty of losing a loved one. Add in the possibility of contentious family members, and it is no wonder that many families are often overwhelmed. In the midst of all of this is the probate process, something that few people understand but is crucial to tying up a loved ones’ affairs.
What Is Probate?
In the simplest terms, probate is the legal process by which a court concludes all of a decedent’s legal and financial matters after death. Essentially, probate is the process by which a court distributes your estate.
If a decedent prepared a Will, the court will distribute the estate in accordance to the Will. If the decedent did not have a written Will, and thus died intestate, then the court and an appointed administrator will decide how their estate will be distributed in accordance with Minnesota laws.
Probate protects the interests of an estate’s beneficiaries and creditors by ensuring the orderly distribution of assets and the payment of debts/expenses. Whether an estate actually goes through probate is determined by the type of property involved, titling to the property, and the overall value of the property in the estate.
Probate property is generally property owned in a decedent’s name alone, such as personal property, bank accounts, automobiles, stocks, etc. Probate property also includes real estate if the real estate is titled in the decedent’s name alone or as a tenant in common. Generally, if the decedent does not have any probate property, probate will not be required.
Even if the decedent’s estate contains probate property, there is another requirement before probate becomes necessary. In Minnesota, if a decedent owned probate property, but the net value of the property does not exceed $75,000, that property can be collected without having to open a probate proceeding through a process known as Collection by Affidavit– a much cheaper and faster process than probate. (Note that Collection by Affidavit does not apply to real estate; it only applies to personal property.)
What’s Involved in the Probate Process?
In Minnesota, the courts follow Minnesota Statutes Chapter 524: Uniform Probate Code when probating an estate. In general, probate of an estate will typically proceed along the following steps:
- Authentication of the last will and testament: If the decedent left a Will, the judge will confirm that it is, in fact, the most recent validly executed Will.
- Appointment of a personal representative: The judge will appoint a personal representative, also called an executor or administrator, to oversee the probate process and to settle the estate. The decedent’s choice for an executor is typically included in their Will. In the absence of a Will, the court may appoint next of kin.
- Locating decedent’s assets: The personal representative is tasked with locating and securing all of the decedent’s assets.
- Determination of asset values: The personal representative will determine the date of death values for the decedent’s assets through account statements and appraisals.
- Identifying known creditors: The personal representative will identify all the decedent’s creditors and notify them of the death. The personal representative may also be required to publish notice of the death in a local newspaper to alert creditors that are not known. Creditors typically have a limited period of time after receiving a notice of death to make claims against the estate.
- Paying bills: The personal representative will pay the decedent’s final bills, including creditors’ claims. The personal representative can reject claims if he or she has reason to believe they’re not valid. The creditor might then petition the court to have a probate judge decide whether the claim should be paid.
- Preparing and filing income tax returns: The personal representative will file the decedent’s final personal income tax returns. He or she will determine if the estate is liable for any inheritance taxes, and, if so, file these tax returns as well. They will pay any taxes due from the estate funds, liquidating assets if necessary. Estate taxes are usually due within nine months of the decedent’s date of death.
- Distribution to the beneficiaries: When all these steps have been completed, the personal representative can petition the court for permission to distribute what is left of the decedent’s assets to the appropriate beneficiaries.
The Minnesota probate process can be daunting and time-consuming without the guidance of an experienced Minnesota probate attorney. Contact us if you have any questions about probating an estate, strategies for avoiding probate (and whether probate avoidance is even beneficial), or to discuss your specific circumstance.