PROBATE TRUTHS (and "Truthiness")

Comedian Stephen Colbert popularized the term “truthiness”, defined to mean “the quality of seeming or being felt to be true, even if not necessarily true”. For “probate”, truthiness abounds! Here are three myths, and three truths about the probate and estate settlement process:

Many speakers at estate planning “seminars” will state the cost of probating an estate at 4-6% of the value of the estate: for a $1,000,000 estate, cost of $40,000-$60,000! But, “truthiness” about cost abounds.

Myth #1: Probate takes a long time

The probate process takes place where a person has died owning real estate or significant financial or other assets in the deceased person’s own name (with no joint owner or named beneficiaries). Everyone can tell a horror story about an estate which lasted for many years, with accounts frozen and the estate unable to pay its bills.

Truth: In Minnesota, many estates can be probated using “informal” probate, which calls for filling out a 2 ½ page probate application, and filing the application with other paperwork with the Registrar of Probate in the County where the person died. After reviewing the filing, the Registrar of Probate issues the probate notice which is published for two weeks in the legal ads in a local newspaper. Following the publication, the appointment of the personal representative (“executor”) is complete, and the personal representative is able to collect assets, pay bills, and handle the business of the estate.

Within nine months after the date of death, the personal representative is to file an inventory listing the assets and values of the estate; when all the assets are collected and the bills paid, the personal representative can close the estate. Duties of a Personal Representative.

We tell our clients that they will usually be able to handle the business of the estate within 30 days from the date the application is filed with the Registrar of Probate. Most estates handled by our firm are completed within nine to twelve months from beginning to end.

Myth #2: Wills are often contested

Worried about a will contest? Imagining the family gathered around the lawyer’s desk, with siblings shouting at each other? Seen a movie or TV show where Grandpa cut someone out of his will, and the family went to trial?

Truth: Will contests are extremely rare, and rarely successful. To properly execute a will in Minnesota, the person signing the will (the “testator”) signs the will in front of two independent persons who witness that the testator signed the will without undue influence, knowing the contents of the will, and with sound mind. All signatures are notarized, often by the lawyer who wrote the will and handled the signing.

To win a will contest, a contestant must prove by clear and convincing evidence (a very high standard) that the testator was not of sound mind, or that someone exerted a tremendous influence on the testator.

Our firm has helped thousands of clients with their wills, and handled many of their estates; in over 40 years, one of the wills we prepared was contested (and the contestant lost: the will was properly handled).

Myth #3: Probate is expensive

Many speakers at estate planning “seminars” will state the cost of probating an estate at 4-6% of the value of the estate: for a $1,000,000 estate, cost of $40,000-$60,000! But, “truthiness” about cost abounds.

Truth: Remember “informal” probate? With this “paper” process, no court appearances are required and lawyer time is less. The filing fees and publication costs for an informal probate usually are less than $500, and in the absence of family fights, complex business or farm issues, or complicated estate tax issues, legal fees are a fraction of the “4-6%” cited at the seminars. In fact, Minnesota prohibits lawyers from charging fees to an estate based solely on the size of the estate.

Conclusion? There are great reasons for using beneficiary designations, trusts, and business entities to help with estate planning (see Transfer on Death Deeds article, beneficiary designations). But, the probate process does not have to be lengthy, controversial, or costly. We are honored to have helped thousands of people and families with their estate needs over more than 40 years: feel free to contact our firm if we can help you.

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Categories: Estate Planning