We’ve discussed the challenges of the Minnesota probate process before.
One thing we briefly touched on was that Minnesota has a law which says not everyone need bother with the probate ordeal. The exception applies to what are known as small estates, those with a total value of less than $75,000.
The rationale for the small estate exemption is that legislators understand not only how time consuming, but expensive the probate process can be. The law exempting small estates from the process is meant to ease the transfer of relatively small sums of money and ensure that smaller estates are not devoured in legal fees and probate expenses.
A small-estate affidavit is a legal form used by an heir to collect the property from a deceased friend or relative, the decedent. Other methods of estate collection, such as probate, are almost always more expensive than a small-estate affidavit. An heir can use a small-estate affidavit if the estate’s worth is below the $75,000 limit set by Minnesota law.
The section of Minnesota law that deals with the issue is contained in Minnesota Statute 524.3-1201 . The statute says that the heir of an estate is permitted to collect the property of a recently deceased person using nothing more complicated than an affidavit and death certificate. This means that assuming the particulars contained in the statute are followed, an individual will be allowed to access a person’s bank accounts, safety deposit boxes, stocks, bonds and any other asset contained in the estate.
To take advantage of this expedited process, you have to be sure that several important factors are met. First, the total value of the estate must be less than $75,000. That number is calculated by taking all the money, assets and real estate the decedent owned, minus debts, such as medical bills and mortgages on a house. This monetary limit is critical and the entire reason for the existence of the statute. The new limit was increased in 2009, previously Minnesota estates had to have a value of less than $20,000 to qualify.
The second requirement is that no other jurisdiction can be considering any petition for the appointment of a personal representative. The final requirement says that the person who is attempting to collect the recently deceased person’s property must complete an affidavit certifying that he or she is the one legally entitled to the decedent’s property. If there’s a will in place, a personal representative can easily sign such a certification saying that you are entitled to the property mentioned in the affidavit and have a legal document supporting your claim.
While allowing for an increased size in what is defined as a “small estate” is a good thing for many who can now avoid the trouble of a lengthy Minnesota probate process, there are downsides. First of all, by expanding the limit for what qualifies as a small estate it increases the chance that assets will be distributed improperly. This can mean both intentional misappropriation of assets and honest mistakes.
As the size of the estate at issue increases, so does the size of the assets that could be mistakenly handled. It’s also possible that a personal representative will distribute property to heirs before paying claims against the estate, which increases the chance that they will be held liable to creditors whose rightful claims were ignored.
Another serious concern with the rise in the small estate limit is that more people are susceptible to the harm of unauthorized practice of the law. The increase has prompted some financial planners to try and “help” by drafting small estate affidavits for clients. This can lead to expensive mistakes due to shoddy drafting which is why its so important that anyone with questions consult a licensed Minnesota estate-planning attorney who can help guide you through the process.
An experienced Minnesota estate-planning lawyer can help walk you through the probate process , answering questions along the way. For more information on estate planning in Minnesota, along with a variety of other topics, contact Joseph M. Flanders of Flanders Law Firm at (612) 424-0398.
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