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How to Keep your Family out of Probate Court in Minnesota

May 17, 2019

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WHAT'S THE BIG DEAL ABOUT PROBATE ANYWAY?

January 30, 2018

What’s the big deal about probate court in Minnesota anyway?

 

What exactly is “probate”?

 

First, let’s define probate.  It’s another one of those annoying legal terms. Probate is the legal process where a judge determines how a deceased’s assets are distributed at their death. People often ask, “Well, doesn’t the judge just follow my will?”  The answer is, “That depends”. 

 

Probate is a court proceeding used to transfer the assets of a deceased. If a deceased does not have an Estate Plan in place that contains a trust, their assets will likely pass through probate. During the process, a judge will ultimately decide how the assets are distributed who will act as personal representative of your estate as well as appointed guardian for any children who are minors.

 

The personal representative is usually the party to hire a probate attorney to assist in the process. The personal representative must take on a tremendous amount of responsibility for the administration of the deceased estate. Essentially this person has the power and duty to take possession of and to manage, protect and preserve the assets of the decedent. Among those responsibilities are:

 

 

  • Collecting and protecting the assets
     

  • Paying bills
     

  • Keeping a strict accounting to present to the court
     

  • Distributing to beneficiaries
     

Upon commencement of a probate action, a probate attorney will likely require the personal representative to provide documentation of the decadent’s estate including:

 

  • Death certificates

 

  • Any will, codicils or separate writings of the decedent

 

  • Payment of any funeral or burial expenses

 

  • Location of the original will if there is one

 

Location of any safe deposit box

 

  • Management of assets including personal property and real estate

 

  • Identification and location of all heirs
     

  • Title papers for real estate
     

  • Any information about assets and their value
     

  • A list of creditors and the decedent’s debt

  •  

  • The last income tax return of the decedent
     

 As you can see, this process can be grueling and extremely time consuming for the personal representative of the estate.

 

But you may be asking, “Isn’t it much cheaper to go through probate court in Minnesota than to create a trust?"  The answer is yes and no. The cost of a trust at the planning stage is more expensive than crafting a will based Estate Plan. However, the cost of probate in the State of Minnesota is much higher than you'd ever expect.

 

Let's talk about some of these costs. Probate costs in the Minnesota Twin Citiest Area and surrounding areas include:

 

  • Court filing fees

 

  • Publication and service fees
     

  • A bond

 

  • Attorneys fees


Court Filing Fees


As usual, the government wants it's cut. It is not unusual for a court filing fee which is required in order to get the probate action rolling, to exceed several hundred dollars. In Minnesota, the current cost for filing fees (although varies by county) exceeds $320.00 in Minneapolis, St. Paul and surrounding areas.

 

If there are motions filed by interested parties, additional filing fees will be required. Interested parties may include heirs at law, beneficiaries, creditors, or in the case of Prince’s estate: opportunists. Prince’s heirs will likely go broke responding to motions before they get rich from distributions of his estate.

 

Publication and Service Costs

 

In addition to filing fees, the estate is required to serve notice upon interested parties. Heirs, beneficiaries and creditors must receive notice of the personal representative’s intent to probate the estate. Although the rules are likely different from jurisdiction to jurisdiction, commonly notice is to be done two ways: by service of process and by publication. The cost for service of process is going to vary depending on the ability to locate an interested party. If they are local and their whereabouts are known, it will be far less expensive than trying to track down a long lost relative who may be overseas.

 

The cost of publication in Minneapolis and St. Paul jurisdiction is $200-$400 per notice made by publication.

 

Bond

 

In some cases, the probate judge will require the personal representative to obtain a bond. If the will refers to a bond or if there are creditors of the estate whose interest is in excess of $1000.00 made seek a bond and the judge may require it. Bonds can be costly (often a percentage of the fair market value of the estate). If the court requires a bond and the personal representative fails to file the bond within a certain number of days, the failure to act is the basis for removing them as the personal representative of the estate. It is easy to see why this can become a burden on the personal representative. He or she would be required by court order to come up with many thousands of dollars to obtain a bond or risk in some cases, a creditor, bank or stranger being appointed as successor personal representative to an estate in which it has an interest.

You heard about the costs associated with court filing fees, service and publication costs, money required to obtain a bond and now we will discuss attorney’s fees.

 

Attorney Fees

 

You probably guessed it: we attorneys like to get paid. Statutes relating to attorneys fees vary from jurisdiction to jurisdiction. Hourly fees are more popular with attorneys than clients and most clients can expect to be billed on an hourly basis. A fixed fee amount is more attractive to clients. As a top-rated estate planning attorneys in Minnesota we believe our client deserve to know what probate is going to cost them up front. Therefore, all of our fees are done on a flat fee basis.  We recognize twin cities residents don’t like receiving ongoing bills for an undetermined amount at the end of each month.  We know it frustrates clients.

 

Some states set a percentage of the fair market value of the estate for the cost of attorney’s fees. In Minnesota, estate planning and probate attorneys are required to show the court that  the fee is just and reasonable. I've seen these percentages range from 2 to 5%.  Other states layout factors for determining whether an attorney fee is reasonable.

 

Regardless of the arrangement, the party hiring the Minneapolis probate attorney (typically the personal representative), is responsible for fronting the costs of these attorneys’ fees. 

 

How Long Does Probate Take?

 

The length of time it takes to probate an estate varies tremendously.   On average, a mid-range estate where there isn’t any business interests at stake, takes about one to one and a half years to wrap up.  I commonly see estates in Hennepin County (Minneapolis) being probated where there are business interests or contests involved that are probated for over a decade. 

The significance of this is that until the probate action is closed, all of the assets of the estate are tied up.  This means that the family of the deceased cannot use or sell any of the assets during that year or more.

 

Potential for Litigation

 

Now that you understand how probate poses a problem because of its lengthy process, let’s talk about another risk:  exposure to litigation. 

The probate process requires that notice be given by publication and also that interested parties be served with notice.  Publishing all of the assets and debts of an estate cannot only be embarrassing, but sometimes intrusive.  If the estate has a laundry list of creditors, the heirs should prepare for them to step up and make a claim against the estate.  If the estate is large, opportunists could come forward to make a claim against the estate (remember the dude in prison claiming to be Prince’s son?). 

Opportunists aren’t always exclusive to strangers of the estate.  It isn’t uncommon to see brothers and sisters duking it out in probate court when they should be relying on one another for support during a time of grieving.  Doesn’t most every family have one person who lives a life of entitlement?   Responding to creditors and opportunists only causes additional expense to the personal representative and ultimately the estate.

 

Now you’ve heard about probate and why it IS a big deal.  You know that probate is expensive, that it’s a lengthy and public process that ties up the assets of the estate and that it invites opportunists.  Now you can see that although it’s cheaper to set up a Will, a will will land your loved ones in probate court in Minnesota and costs them much more money in attorney fees, costs and unnecessary heartache than had you put together a Trust-based Estate Plan with a top Estate Planning and Probate Lawyer in the Twin Cities.

 

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