Probate & Estate
Administration
One of the most common things we hear in estate planning is, “I want to avoid probate.” Yet, many people only have a vague understanding of what probate really is - which is understandable, because most people aren’t attorneys, and that’s why they come to us. Essentially, probate and administration are the other side of the estate planning coin. In estate planning, we come up with a plan for what will happen to a person’s assets when they pass, and when we go through the probate and/or administration process, we’re putting that plan into action.
That said, probate is only a part of the equation. When a person passes, three things can happen to their estate: 1) it can pass through probate; 2) it can pass through a non-probate administration; or 3) a mixture of both can happen. These processes can vary in complexity based on the debts and assets a person has, their wishes, and a number of other factors. Contact us today if you want help from a probate attorney in navigating these processes, or if you have questions about what’s involved.
Probate
The probate process is a court-supervised legal proceeding that takes place after a person’s death to ensure the proper administration and distribution of their estate. When someone passes away, their assets - such as property, money, and personal belongings - must be collected, debts and taxes paid, and the remaining assets distributed to rightful heirs or beneficiaries. If the deceased left a valid will, the court confirms its authenticity and grants authority to the named executor to carry out its instructions. If there is no will, the court appoints an administrator and the estate is distributed according to state laws of intestacy.
Probate serves several important purposes, including protecting the rights of creditors, resolving any disputes over the estate, and ensuring that assets are passed on legally and transparently. While the process can vary depending on the complexity of the estate, it generally includes filing the will (if any) with the court, notifying beneficiaries and creditors, inventorying and appraising assets, paying debts and taxes, and finally distributing what remains. In some cases, simplified procedures or alternatives to formal probate may be available for small or uncomplicated estates, helping families avoid lengthy and costly proceedings. Some of these options are designed to be DIY-friendly, while others almost require the services of a probate attorney to navigate them.
Minnesota, for example, has three main types of probate proceedings, all with differing levels of complexity: Informal Probate; Formal Probate; and Summary Administration.
Informal Probate is the most commonly used and least complex form of probate in Minnesota. It is administered by a probate registrar, rather than a judge, and is best suited for estates where there is no dispute over the validity of the will or the identity of heirs. This process avoids formal court hearings, making it faster and more cost-effective. Informal probate can be used for efficiently appointing a personal representative and distributing assets, provided all parties are in agreement and the estate is relatively straightforward. However, there are limitations on eligibility for informal probate. Among other things, the estate must not be insolvent, there can be no substantial disagreement between heirs, the validity of the will cannot be contested, etc.
Formal Probate involves judicial oversight and is often used when there are legal complications, such as a contested will, unclear terms, disputes among heirs, or problems with asset titles. A district court judge presides over the proceedings, which may require court hearings and legal filings. Additionally, formal probates may be supervised or unsupervised: In a supervised probate, the court closely monitors the actions of the personal representative; while in an unsupervised probate, the representative acts with more autonomy, although still under the court’s jurisdiction.
Summary Administration, offers a streamlined probate process, typically for small estates. It applies when a deceased person has no probate assets; their only probate assets are their homestead, other exempt property, and family allowances; or when the estate’s assets beyond homestead property and exempt property are worth $150,000 or less. Once the court determines the estate qualifies, and other requirements have been met, it may summarily assign the estate property to the heirs.
Simple as it sounds, the nuts and bolts of the process can be complex, tedious, and somewhat arcane. That’s where the probate attorney comes in: We worry about interpreting the legalese of the documents, filing the right forms and following the right processes, so you can worry about honoring your loved-ones wishes. Contact us today to see how we can help.
Estate Administration
Probate often isn’t all that needs to occur to settle an estate, however. While many estate plans - particularly trusts - are designed to avoid or minimize the need for probate proceedings, that doesn’t mean these plans are effort-free. Non-probate estate administration refers to the process of transferring a deceased person’s assets that do not require involvement in the probate court system. Certain assets pass directly to named beneficiaries or co-owners by operation of law, avoiding probate entirely. Common examples include property held in joint tenancy, accounts with payable-on-death (POD) or transfer-on-death (TOD) designations, life insurance proceeds, and retirement accounts with designated beneficiaries. These transfers are typically faster, more private, and less expensive than probate proceedings.
Additionally, if the deceased person transferred property into a trust as part of their estate plan, then the trust they created will need to be administered, as well. A successor trustee, typically named in the trust document, is responsible for carrying out the grantor’s instructions, which usually includes identifying and safeguarding trust assets, notifying beneficiaries, paying any debts or taxes, and distributing property according to the terms of the trust. Unlike probate, trust administration usually occurs without court involvement, making it more private and often more efficient. However, the trustee still has a fiduciary duty to act in the best interests of the beneficiaries, follow the terms of the trust, and comply with applicable state and federal laws. Legal and financial guidance is often essential to ensure the process is handled properly and to avoid potential disputes or liabilities.
And, in case things weren’t complicated enough, many trust plans also include a pour-over will. A pour-over will is a type of will used in conjunction with a trust, directing that any assets not already placed into the trust during the person's lifetime be transferred - or "poured over" - into the trust upon their death. This ensures that all assets are eventually governed by the terms of the trust, even if some were overlooked or acquired later. While a pour-over will still requires probate for the assets it covers, despite the fact that a trust-based estate plan was in place, it acts as a safety net to ensure assets are distributed as intended.
Just like in probate proceedings, though, the complexity of estate administration is in the details. There are numerous legal documents which need to be interpreted, financial institutions and government agencies which must be contacted - often with their own sets of procedures that must be followed, and complications which must be dealt with. If that sounds a bit overwhelming, or if you’d just like to have a trusted advisor by your side when things get complicated, contact us to see how we can help.
Who Pays for All This?
Probate costs are typically paid out of the estate itself, not by the heirs or personal representative personally - though it is not uncommon for the personal representative to advance the initial costs (court filing fees, retainer, etc.) and be reimbursed by the estate later. The overall costs of probate can include:
Court Filing Fees: Approximately $285.
Publication Fees: Approximately $350.
Attorney Fees: Depends on complexity. Simple probates may have a flat fee of a few thousand dollars, while more complex and contentious cases are typically billed at an hourly rate.
Personal Representative Fees: The personal representative of the estate is often entitled to a reasonable hourly rate for their services, which will vary based on the complexity of the tasks they must complete.
Appraisal Fees: Some property needs to be appraised so that it can be accurately accounted for (think valuable collections, artwork, classic cars, etc.), which can cost $500 or more per asset.
Altogether, the costs of probating a small estate with no complications is often in the range of $5,000. A more complicated probate proceeding - for example, one with substantial disputed creditor claims or conflict between heirs - can be much higher. The costs involved in such probates can reach $10,000 or more. This is one area where our “Practical Approach. Pragmatic Solutions. That’s it.” philosophy comes into play. In a contested probate, everyone loses, because the estate gets smaller as the costs go up - so the efficient resolution of disputes is a top priority for us, as it preserves more of the estate to go where the deceased person wanted it to.
If you need help with the probate and administration process, or just want to talk to a probate attorney about your options, contact us today.