Why You May Still Face a Probate

Why You May Face a Probate

Probate is the legal process for recognizing the validity of a will after a death and giving authority to someone to administer the estate This person, also known as an executor or personal representative, administers the deceased person’s estate and ensures that their assets that don’t already say where they go through beneficiary designations are transferred to the beneficiaries specified in their will. If they don’t have a will, then the beneficiaries are determined by State law.

Probate is expensive and it can take time for your loved one to get the authority they need to safeguard, administer, and distribute your assets. Probate is also public and now the records are easily searchable online.

So, when is a Probate required?

Assets are stuck.

This accounts for the vast majority of probate court proceedings. Too many assets are stuck in the now dead owner’s name because no beneficiary is listed on the asset, it’s not owned in trust, or it isn’t owned with a surviving joint owner.

Minnesota requires a personal representative to transfer assets in two situations. The first is when real estate is stuck. That’s why correct real estate titling and deeds can be such an important aspect of an estate plan that actually works. The second situation is when the value of all the assets that are stuck exceed $75,000.

When what is stuck does not include real estate and the value of what is stuck is less than $75,000, Minnesota allows for administration outside of probate. Essentially, the State says it isn’t enough to bother the court with. This administration is a short affidavit. Typically, the first step in administering an estate, is learning what the person had and what of it is stuck in their name.

A Personal Representative Is Needed to Represent the Estate In Court

Sometimes, a personal representative must be officially appointed to defend the estate in a court action. For example, in Sander v. Commissioner,^[1] Sandy and her daughter Leda were co-trustees of a revocable living trust that Sandy had created. In addition, Leda was nominated as the personal representative by Sandy’s will. When Sandy died, Leda became the sole trustee of Sandy’s trust. Leda’s attorney told her that there were no accounts or property that needed to be probated; as a result, Sandy’s will was never probated, and Leda was never officially appointed as personal representative of her estate.

After Sandy’s death, the Internal Revenue Service issued notices of deficiency to Sandy for amounts it asserted that she owed in unpaid taxes. Leda filed a motion for redetermination of the amounts and sought to be substituted as a party for Sandy in the case. However, the tax court found that although Leda was the trustee of Sandy’s trust, she did not have the authority to act for her mother’s estate in litigation that did not involve trust property but instead involved only a redetermination of Sandy's income tax deficiencies for two years prior to her death. Rather, a personal representative needed to be appointed who could litigate the case on behalf of Sandy’s estate.

In similar circumstances, even when all or most of a deceased person’s accounts and property are transferred outside of probate, a probate proceeding may still be necessary to appoint a personal representative to represent the estate in court.

A Loved One Needs Access to Medical Records

Medical providers are prohibited from sharing medical records under federal law. That can pose a problem when the family has questions about the cause of death or treatment provided. Without that access, the family needs an order from a Probate court to release those records.

A valid health care directive can give authority to access records after death but must specifically do so. A health care directive can be an important part of a comprehensive estate plan that minimizes the need for probate.

Give Us a Call

We can help create strategy to minimize the likelihood your family will face a probate. If your loved one has died and you need help to administer assets, we can assist you in the most efficient administration possible.

^[1] 124 T.C.M. (CCH) 237 (2022).