Probate is the process of inventorying and collecting the assets of a deceased person (called a “decedent"), then using those assets to pay or settle valid debts that the decedent had incurred and expenses associated with administering the decedent’s estate. Once those tasks have been completed, assets will be distributed in accordance with the decedent’s Will or, if there was no Will, with the Minnesota Intestacy Statute.
How a Probate is Administered
Probates are administered by a Personal Representative that is usually nominated in the decedent’s Will. If there is no Will or the nominee in the Will is unable or unwilling to serve, the court can appoint a Personal Representative. Once appointed, documents known as Letters Testamentary (if the decedent had a Will) or Letters of General Administration (if the decedent did not have a Will) can be used by the Personal Representative to perform any tasks that the decedent could have performed. These include opening or closing financial accounts, receiving private information about the decedent, collecting assets, and more. The Personal Representative will use these powers to collect and inventory the estate’s assets, assess and pay the decedent’s debts, and distribute assets in accordance with a Will and/or Minnesota law.
When Probate is Necessary
In Minnesota, a probate can be opened virtually any time that a person has died, as long as no more than three years have passed since the date of death. However, a probate generally must be opened if the estate contains real estate that needs to be transferred or sold or if the estate has total assets in excess of $50,000.00 in value. It is worth noting that “non-probate assets" such as property held in joint tenancy, pay-on-death accounts, or accounts with direct beneficiary designations (such as most IRA’s), generally are not considered part of the estate for probate purposes.
Types of Probate
In Minnesota, there are generally three types of probate proceedings available to administer estates. These types vary in their complexity, time requirements, and expenses involved. Knowing which to choose depends on the facts and circumstances of each particular estate.
The first type of probate is known as “informal" probate. Informal probates are generally conducted without court hearings and without the direct involvement of a judge. Instead, the probate is overseen by a Probate Registrar, who will approve the estate’s Application for Probate and issue the necessary paperwork to allow administration to begin. Once that documentation is issued, there is generally little or no oversight by the Registrar. Instead, the Personal Representative provides an Inventory, Final Account, and other documentation to the heirs and other interested parties of the estate as the administration is conducted. Those parties then have the option of contesting the Personal Representative’s actions or consenting to them. Once all actions have been consented to, the Personal Representative can close the estate.
The second type of probate is known as “formal unsupervised" probate. This type of administration is very similar to informal probates, except that formal unsupervised probates begin by petitioning a judge to open the probate, rather than a Probate Registrar. This allows the Personal Representative to have any initial issues resolved regarding the Will or the Personal Representative’s appointment, as well as to have a judge already assigned to resolve issues that may arise later. If no issues do arise, then the Personal Representative can proceed to administer the estate in much the same way as an informal probate after he or she is appointed by the judge. In Minnesota, some counties will require a court appearance to hear the initial petition, but others will admit the Will and appoint the Personal Representative administratively.
The third type of probate is known as “formal supervised" probate. This type of administration involves significant oversight by the Court, including approving any asset distributions the Personal Representative might make. This type of administration is more costly and time consuming, but is the best suited for handling challenging issues such as parties contesting the validity of the Will, conflicts or mistrust between the Personal Representative and the decedent’s heirs or distributees, or other problems that require judicial intervention.
The time it takes to probate an estate can vary greatly. Some estates can be administered in just a few months, but more often the process takes around a year. Larger estates, estates requiring the sale of real property, or estates that require litigation can take over a year or even several years.
Probates are used to gather, inventory, and distribute a deceased person’s assets. They are also used to pay debts of the decedent, resolve disputes, and clarify any issues that arise through the administration of the decedent’s Will or the Minnesota Intestacy Statute. There are three main types of probate, and choosing the correct one is dependent on the unique circumstances of the deceased person’s estate. Consulting an attorney can help ensure that an estate is administered properly and a decedent’s wishes are honored.