Probate is the legal process of identifying the assets of someone who is recently deceased and distributing the remaining property.  Assets are distributed according to the deceased person’s wishes, as laid out in a Will, or in the absence of a Will, according to Minnesota law.  Minnesota law gives property to the closest relatives to the deceased, typically a spouse and children.  If the deceased has no spouse or children, then the property passes on to any living grandchildren, parents, brothers, and sisters and on down the line to more distant relatives.  If there are no relatives located then the money stays with the State of Minnesota.

However, probate is not always required after a loved one dies.  If assets are kept in a revocable living trust, the process of probate can be avoided.  Probate takes time and costs money, so if it can be avoided most families entering into estate planning will try to avoid probate.  Additionally, the trust property is not considered part of probate because a trustee owns the property, rather than the individual.  After a person’s death, the trustee can simply transfer assets within the trust, pursuant to what the deceased person set up, all while avoiding probate.

A revocable living trust is not the only property that does not have to go through the probate process.  Ownership of an asset is what determines whether it has to go through probate or not.  Assets that do not have to go through probate include property held in joint tenancy, property that is payable on death, annuities, life insurance, and retirement plans that have designated beneficiaries.

Assets that do not transfer upon death require the probate process.  These include property held in tenancy in common, property in the deceased person’s name alone, assets without beneficiaries listed, and assets with a deceased beneficiary and property that does not have any title.  The probate court needs to determine the ownership of these assets and how they should be passed along.  These assets will be passed by the probate court to the appropriate heirs.

It is important that those planning their estate understand that having a Will does not avoid probate.  This is a common misconception.  Another common misconception is those small estates do not have to go through probate.  It is true that small estates worth less than $50,000.00 avoid probate.  Most persons who own their home outright will find their estate is worth more than that and should plan accordingly.  If an estate is worth less than $50,000.00, then heirs can simply file an Affidavit for Collection of Personal Property 30 days after the deceased’s death with a Minnesota court.  A probate attorney can also be helpful in facilitating this process and making sure assets end up where the deceased wish them to end up.

When a loved one passes away it can be a difficult and confusing time with all the legal implications.  Taking a little time to understand the probate process will help resolve any issues related to where assets are supposed to end up after a loved one passes away.

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