Probate is a process which provides an
orderly method of paying debts, distributing assets and managing the
settlement of an estate. Minnesota has adopted the uniform probate
code which does avoid some of the problems that existed before its
adoption. However, because it is a court and attorney driven process
there are inherent delays and costs.
The process typically follows most if not all of the items listed
- Find and interpret the Will.
- Appoint a Personal Representative (the administrator of the
estate - often a surviving spouse or a family member).
- Determine the extent and value of the estate (probate assets,
as well as non-probate assets).
- Find and pay creditors of the deceased.
- Deal with minor children.
- File tax returns for the deceased (income tax) and for the
estate. And if the estate is large enough, file estate tax returns
(federal and state).
- Pay legal, accounting and other expenses of the probate
- Determine who the heirs are.
- Distribute the assets to the heirs.
Some assets will are not subject to the probate process, except
that they may be counted towards the value of the estate for estate
tax purposes, and they may be used to pay creditors if there is not
enough probate assets available to pay legitimate claims. Examples
of non probate assets include jointly owned property (the survivor
automatically receives the asset) and assets that pass by
beneficiary designation like life insurance. Small estates, with
probate assets of less than $20,000 are not required to complete the
The basic problems with probate are that the process is:
- open to the public (not usually an issue except in small towns
- or for people whose celebrity or wealth would induce others to
peer into the court files);
- one that may delay access to and distribution of assets (a
typical probate takes a year from start to finish);
- costly; and
- control rests in the judge.
If you have assets in your individual name, your estate will be
subject to the probate process, unless the fair market value of
those assets are less than $20,000. Couples with will based plans
may sometimes avoid probate at the first death. If most assets are
held in joint tenancy, like their house or a bank accounts, or if
they are payable by beneficiary designation to the survivor, those
assets are not subject to the probate process. But, typically at the
second death the survivor would hold his or her wealth individually
and a probate would be required.
Even without a probate there will be some expense and delay
incurred. Bankers, brokerage houses and life insurance companies
need a lot of 'i's dotted and 't's crossed. But, a little planning
can avoid much of the expense and delay. For information on probate
avoidance see the section on Revocable Living
Law Offices of Richard
Rick Jensen, Attorney and Counsellor at
(952) 944-0406 or email@example.com