We’ve discussed how assets pass after death in previous posts on our blog, but how do we know when a probate is actually required?
The assets owned by a deceased person can be split into two separate categories: probate assets and non-probate assets.
Non-probate assets are those assets that have a beneficiary or pay-on-death designation, have a joint owner who has a right of survivorship, or those assets administered by a trust. These assets pass outside of the probate estate.
Probate assets are everything else: bank accounts without a pay-on-death designation, stock or life insurance policies without a beneficiary designation, real estate not owned jointly or that does not have a transfer-on-death designation, or personal property.
Even if we have assets that are considered a part of the probate estate, sometimes a probate is still not necessary. Minnesota law provides that if the value of the entire probate estate, determined as of the date of death, wherever located, including any contents of a safe deposit box, less liens and encumbrances, is less than $75,000, then interested persons (as defined by statute) can use a document called an Affidavit for Collection of Personal Property, sometimes also called a Small Estate Affidavit, to collect the personal property of a decedent. Property can be collected as soon as 30 days after the date of death.
Note that this Affidavit for Collection of Personal Property does not apply to estates exceeding the $75,000 threshold or those where the decedent owned real estate. If real estate is involved (and there is not a joint owner), then the estate must be probated in order to properly transfer title to the real estate.
There are also instances in which a probate may still be preferred to using the Affidavit for Collection, such as where it would be difficult or impossible to transfer title or ownership to a survivor without court intervention. This often occurs with stock transfers or transfer to minor beneficiaries.
Navigating the estate administration process can be complicated. Our attorneys can advise you on the most appropriate way to administer an estate, whether that be through a simple Affidavit for Collection of Personal Property, probate, or trust administration.
Call our office at (507) 288-5567 or book an appointment online to speak with one of our attorneys today!