What Is Probate?
Probate is the legal process of settling an estate in court after someone dies. The deceased person’s property is gathered and inventoried, their debts are paid, and everything left over is divided among the heirs or devisees (if there is a will). The personal representative is responsible for “probating” the will. You can name your personal representative using a will, if there is no will or a personal representative is not named in the will, Minnesota law determines who will be the personal representative.
Probate begins by filing an application with the probate court in the county where the deceased person lived or owned real property. Probate ends when all debts and taxes are paid and all assets are distributed. If there is disagreement over any aspect of probating the estate, a probate judge will resolve the differences.
When Is Probate Necessary?
Probate law in Minnesota applies to the estates of people who were residents of Minnesota at the time of their death. Probate also applies to other states’ residents who own property in Minnesota.
If an estate has more than $50,000 worth of assets that are not transferable using other means (i.e. beneficiary designations for example), then the estate must be probated to transfer those assets to the designated persons or heirs of the decedent.
Having a will does not avoid probate. The need for probate depends on what property you own and how you own it. Unless real estate is owned in joint tenancy with right of survivorship, placed into a trust, or transferred using a transfer on death deed (TODD) it must be probated. If you are a resident of Minnesota and own real estate in another state at the time of your death, the probate laws of that state will apply to that real estate. In other words, real estate is probated in the state where it is located.
What Items Are Not Subject To Probate?
Some kinds of property and assets do not need to be probated. These include property owned as joint tenants, jointly held bank accounts, payable-on-death accounts, life insurance, IRAs, 401ks or any account with a designated beneficiary.
Joint Tenancy Property: Holding title to property in joint tenancy means that you and another person each have an undivided interest in the property and a right to own it after the other person dies. In the case of real property, this will be stated in your title document. When a co-worker dies, the surviving property owner files an affidavit of survivorship with a certified copy of the death certificate of the deceased property owner with the county recorder or registrar to transfer the property to the surviving owner.
Jointly Held Bank Accounts: As in joint tenancy of real property, you and one or more people may be listed as account holders of the same financial account. If one of the joint account holders dies, the other joint account holders own the money in the shared bank account.
Payable-On-Death Accounts (PODs): A payable-on-death account is an individually owned account in which you choose someone else to receive the funds in your account upon your death. The beneficiary, or person getting the money upon your death, has no right to these funds until your death. You may set up a POD by contacting your financial institution.
Beneficiary Designations: Your life insurance policy, IRA, 401k, etc. can indicate a specific person, called a “beneficiary,” who will receive these proceeds from the account when you die.
One cautionary note on beneficiary designations or payable on death accounts. These designations must be kept updated to reflect any change in family or circumstances.
How Do I Probate An Estate?
The personal representative starts a probate proceeding by filing an application or petition with the probate court in the county where the deceased person lived at the time of their death. Probate proceedings in Minnesota may be either formal or informal, and generally must be initiated within three years after the decedent’s death. If more than three years have passed, then heirs may petition the court for a decree of descent to establish title to real estate.