Not All Probate Actions Are the Same in Minnesota

One Minnesotan’s probate action may differ considerably from that of another’s.

If you die with more than $50,000 in assets in your name alone, or own real estate in your name alone, a probate proceeding is required in Minnesota to handle the transfer of your assets.

For most Minnesotans, probate is either “formal” or “informal”.  Formal proceedings are of two types: “supervised” or “unsupervised” by the Probate Court. Informal proceedings are always unsupervised, and entail little court involvement. Supervised proceedings involve considerable Court involvement.

A formal probate proceeding is commonly used when there are problems with the Will, the deceased’s debts are greater than his or her assets, or there are issues with the heirs.

Issues with the Will include situations in which the original version of the Will can’t be found, the Will is not dated, the Will contains ambiguities, or there are legal challenges regarding the capacity of the deceased at the time the Will was signed.  Issues with heirs arise when certain heirs can’t be found, or aren’t clearly identified, or the Will provides an inheritance to a minor.

Under a formal probate process, a petition is filed with the Probate Court, and “all interested persons” are given notice of an upcoming hearing. “All interested persons” include spouses, children, creditors, persons named in the Will, and any other persons having a property right in or claim to the deceased’s assets.

Then a formal hearing is held so that the court can address the matters raised in the petition. The matters include who should be appointed the personal representative, and the acceptance of the Will as a valid Will, or a declaration that there is no Will. Subsequently, the Probate Court issues an order formally appointing someone as a personal representative and addressing the other matters raised at the hearing. (When there is a Will, the person appointed as the official personal representative is usually the person nominated in the Will. When there isn’t a Will, a surviving spouse or a child is typically appointed as the personal representative.)

Next – whether the formal probate is supervised or unsupervised — the assets are collected, an inventory of the assets is prepared, creditor claims are settled, and estate and income tax returns are filed.

With an unsupervised, formal probate, the assets are then distributed. However, a “formal, supervised” administration means that no distributions – except distributions of specific assets to specific persons (or organizations) as stated in the Will – can be made without an order from the Probate Court. Insolvent estates undergo formal, supervised administration for the protection of the personal representative and the creditors.

Other possible proceedings include “summary administration” and “determination of descent”. “Collection by affidavit” avoids probate, and can be used under certain circumstances.

“Summary administration” can only be used when all of the probate assets are exempt from creditor claims, and the value of those assets do not exceed certain dollar limits specified by Minnesota’s statutes. A summary administration is typically faster than the usual probate proceeding because it skips the four-month waiting period that otherwise must be given to creditors to submit their claims. An example of an asset that is exempt under certain circumstances is the deceased’s homestead when it passes to a surviving spouse or to the deceased’s descendants.

“Collection by affidavit” avoids probate, which means that it can only be used when the net value of the probate assets does not exceed $50,000. The value of the deceased’s non-probate assets does not matter. The affidavit is commonly used to collect money or financial assets from a bank or investment account. The person entitled to receive the money prepares and presents an affidavit to the relevant bank to claim the assets. Only a “successor” may collect the property under Minnesota law. “Successor” does not include creditors unless said creditor is a Minnesota state or county agency collecting on a medical assistance claim.  Real estate cannot be transferred by affidavit.

“Determination of descent” can be used if the deceased died more than three years ago, and no estate administration proceeding was started after the death. Creditors’ claims are barred by this time. This procedure is sometimes used to clear title to real estate when the deceased died more than three years ago, but the real estate was never probated. This procedure can be used whether or not the deceased had a Will.

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Disclaimer: This Blog is for informational purposes only and is not to be construed as legal advice. If you have questions, please seek the advice of an attorney licensed to practice law in the state where you live. Wittenburg Law does not expressly or implicitly warrant the accuracy or reliability of any of the Blog’s contents. An attorney-client relationship is not formed by reading this Blog. If you are interested in Wittenburg Law’s representation of you, you must contact Wittenburg Law for a determination of whether your matter is one for which Wittenburg Law is willing and able to accept representation of you.

Bonnie Wittenburg, Wittenburg Law Office, PLLC, 601 Carlson Parkway, Suite 1050, Minnetonka, MN 55305  952-649-9771