Probate Court: What is it and why is it necessary

Probate is the legal process of getting a Probate Court's authority to distribute or transfer a person's property after they die. A person who dies is called a “decedent”. Also, probate court is where a personal representative of the estate is approved by the Court. In Minnesota, probate can be either informal or formal.

What is formal and informal probate?

Informal probate is handled by the probate registrar instead of a district court judge. In formal probate, a judge (or, in Hennepin County, a referee) handles the probate. Informal probate tends to be easier and faster. But formal probate can be required for any number of reasons, including, for example:

  • Estate is insolvent, where the estate cannot pay what it is owed;

  • Original will cannot be found;

  • Heirs or devisees are in disagreement or challenging the will;

  • The will is ambiguous and needs interpretation by the Probate Court;

  • There are minors, persons with disabilities, or creditors that have interests that need protection; or

  • Estate requires complex administration procedures.

Probate must be filed between 120 hours after death and before three years has elapsed from the time of death. Probate is generally filed in the county of the decedent's residence at the time of death.

What happens during probate?

Four things generally happen during every probate:

  • Assets are collected, inventoried, and appraised, as necessary.

  • Asserts – real estate, personal property, and digital assets – are protected.

  • Debts are paid as required by law.

  • The remaining assets are distributed to the proper party as provided by the will or by law.

Additionally, any challenges to the will or disputes among the heirs or devisees will be settled by the Probate Court.

Do I always need to go to probate?

Not in Minnesota. If the following requirements are met, then probate can be avoided altogether:

  • The value of all of the property in the decedent's estate is equal to or less than $75,000.

  • The property is listed only in the name of the decedent. This means that there are no beneficiaries listed or joint tenancies to the property.

  • There is no real estate at issue.

If all of the above is true, 30 days have passed since death, and you are a blood relative, you can use an Affidavit for Collection of Personal Property to collect personal property without having to go through probate.

Additionally, even in an estate where probate is necessary, certain assets may be exempt from probate. For example, if property is owned by a trust instead of the decedent, then the property can avoid probate. Life insurance also does not need to go through probate.

Why would I want to avoid formal probate, or probate altogether?

Formal probate is just that – more formal and complicated than informal probate. It generally requires a lawyer. Informal probate does not require a lawyer. Including a lawyer will cost money, which means less money to be distributed to the beneficiaries or devisees. Also, probate can take a long time – several months to more than a year. For complicated estates, such as Prince's estate, probate can take several years. This, however, is the outlier.

Regarding partial probate, there are certainly incentives to having some of the property avoid probate. First, of course, is if the estate is larger, certain estate taxes can be avoided if property is properly in the right trust. Also, consider a situation where both parents of a young child die in a car accident. It would be ideal for some financing from the estate to be immediately available (e.g., in a trust) to help raise the child. If all financing is locked up in probate for a year and a half, then it may be a burden on the named guardian to raise the child.

As a last consideration, probate is public. If there are privacy concerns with some of the property, then keeping it out of probate will maintain that privacy.

Are there times I may want to go through probate?

There are times that you might want to go through formal probate even if you have the option to avoid it. On a surface level, probate brings finality to the affairs of the decedent that may not be available otherwise. 

One way that finality is brought is by having a forum to resolve any disputes over the will or estate. (See Aretha Franklin's estate.) When filing a petition for probate, there are a lot of mandatory notices that need to go out to anyone who may have an interest in the estate. This includes heirs, devisees, or creditors, and anyone related to the decedent. Once everyone has official notice, there is a deadline by which they need to file any disputes or claims. If there are any disputes or claims, they are resolved by a judge or referee. Thus, if there is a potential for any conflict, Probate Court may be the ideal way to go.

Takeaway

Probate is a complicated process that is necessary for many estates when we die. There are some benefits to probate, but it is also a long and potentially expensive process. If you have questions about the probate process or need counsel to represent you, please contact Signature Law for a free consultation.

Gregory Singleton