Will I Need Probate?
When you’re grieving the loss of a beloved family member, the prospect of handling their estate can feel overwhelming. Many people want to relieve their family members of the burden of settling their estate and wrapping up their final affairs. They wonder about the probate process and whether it’s possible to avoid it altogether.
What Is Probate?
Probate, which is the process of settling a decedent’s estate and distributing his or her property, is a subject that has been sensationalized on television and in the media. High-profile, high-asset estates can spend years in probate court, which makes people understandably nervous about what will happen to their own assets when they pass away. Fortunately, the probate process for people with typical assets is generally much faster and far less expensive.
If you die with a will (testate), the court will appoint your executor to oversee the administration of your estate with court supervision. If you die without a will (intestate), the court will appoint a personal representative to administer your estate with the court overseeing the process. “Probate assets” include any property that does not have a named beneficiary. Common probate assets include things like cars, bank accounts not payable on death, and real estate not titled as a transfer on death deed or joint tenancy with rights of survivorship. Basically, any asset not titled with a named beneficiary must pass through probate.
Because the probate process can be expensive and slow-moving, many people – especially those with substantial wealth – seek to avoid it altogether. Although it is possible to avoid probate, doing so requires a well-crafted, comprehensive estate plan prepared by an attorney with a thorough knowledge of Minnesota probate and estate planning law. Generally, there are three basic ways to avoid probate in Minnesota:
Affidavit of Collection of Personal Property
Minnesota permits some estates to use a short-form probate process through an Affidavit for Collection of Personal Property. This abbreviated probate process is only available for estates with less than $50,000 in probate assets, which cannot include any real estate.
Titling Property to Include Beneficiary Designations
In Minnesota, it is possible to title most property to pass directly to a beneficiary. You can do this with real estate, bank accounts, and even personal property (with a proper affidavit). Although this can work with relatively straightforward estates, it presents potential problems for others. For example, individuals often forget about certain assets or simply never get around to re-titling an asset to include a beneficiary. Furthermore, relying solely on this method doesn’t account for potential state and federal tax implications.
Creating a Trust
The most effective way to avoid probate is through the use of a trust. With a trust, assets are titled in the name of the trust – not the trust’s maker. The trust maker then transfers the assets into the trust. When he or she (or they, in the case of married couples) pass away, the trust retains the assets, which can then be distributed – outside probate – to the trust’s beneficiaries per the terms of the trust.
Minnesota Probate Law Firm
To learn more about the probate process and your options, call the Minnesota probate and estate planning attorneys at Jeffrey P. Scott & Associates, LLC today. 651-968-1457
This website has been prepared by Jeffrey P. Scott & Associates, LLC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.