A Passage into Probate Law

What is Probate Law?

The term “probate” has several meanings and may be the reason why so many people are curious or possibly even unduly fearful of what a probate really is or what is involved with a probate. The experienced estate planning and probate attorneys with Kennedy & Ruhsam Law, along with a paralegal who has specialized in estate planning and probate law for her entire professional career, would like to share with you a passage into probate law that will hopefully deflate the fear and anxiety surrounding probate, in and of itself.

It is a fact that probate can be used as a noun, verb, or adjective. This factor undoubtedly contributes to the confusion about what is involved with a probate. For instance, in the estate planning legal arena, attorneys and paralegals often refer to “probate” property, which is the property that a decedent owned in his or her name alone. Estate planners often say that an estate has to go through “probate.” This generally means that a decedent owned probate property and someone must be appointed by the court to serve as the Personal Representative of the decedent’s estate. The “probate process” refers to the general process by which the Personal Representative gathers the decedent’s assets, determines the debts, expenses, and taxes that need to be paid, and distributes the probate property to the named beneficiaries or heirs. Rounding out the passage into probate is the fact that estate planners often say that the we have to “probate” the will, which simply means that the decedent died with a will and the court must review the will and determine it to be valid and duly executed pursuant to Minnesota laws.

Essentially, a probate is needed for the orderly transfer of a decedent’s assets. Through the probate process, the Personal Representative is given authority by the court to “step in the shoes” of the decedent, take control of the decedent’s property by taking a snapshot of what the decedent owned on his or her date of death, and finally, distribute the property to the decedent’s beneficiaries. By stepping into the shoes of the decedent, you learn what assets the decedent owned at death and form there, you determine whether a probate is needed based on how the assets are titled. It is not as simple as just filing the decedent’s will with the court. Oftentimes, a decedent dies and does not have an estate plan in place, yet there are assets the require a probate to be initiated in order to properly transfer the title on the assets to the appropriate beneficiaries. When there is no will, the beneficiaries of the probate are determined under the Minnesota intestacy statutes.

What are Probate Assets?

There is often a misperception on what property is considered probate property. Probate assets are held by a decedent alone with no beneficiary designation. A probate is necessary to transfer the title on these probate assets, which often include the following:

  • Property that is listed in the decedent’s name alone, without a “payable on death/or transfer on death” or another beneficiary designation.
  • A decedent’s interest in real property that is titled as “tenants in common.” Even if this is property owned with a spouse as tenants in common, a probate is required to transfer the decedent’s one-half interest in the property. Note that real property owned as “joint tenants” is not a probate asset in the estate of the first joint tenant that passes away.
  • Life Insurance or retirement accounts with beneficiary designations that are payable to “the Estate.” Since the life insurance or retirement plan has no beneficiary listed other than the decedent’s estate, the insurance policy or retirement account will be considered a probate asset subject to a probate proceeding.

What are Non-Probate Assets?

On the flip side of probate assets, are the decedent’s non-probate assets. These non-probate assets will pass to the intended beneficiary designation on the title without the need of a probate and often include the following:

  • Real property owned with another person as joint tenants with rights of survivorship. If a joint tenant survives the decedent, the decedent’s interest passes to the joint tenant by the operation of law. The surviving joint tenant will need to record an Affidavit of Survivorship (and death certificate) with the county recorder or registrar of titles where the property is located. There are also the Transfer on Death Deeds (TODDs) that transfer real property to the designated beneficiary(s) at the owner’s death.
  • Property held in a trust, whether revocable or irrevocable.
  • Property that designates or identifies an individual beneficiary, other than “the Estate,” such as life insurance, Individual Retirement Accounts, etc.
  • Property that includes a “pay on death” or “transfer on death” designation, such as a bank account or brokerage account.

As you can see, there is more to probate law than simply filing a decedent’s will with the court. When you step into the shoes of a decedent, you need to identify not only if the decedent had a will, but also what types of assets the decedent owned and how those assets are essentially titled. Taking that snapshot of the assets on the date of death is an essential role for a Personal Representative. It will help to determine whether a “probate” will be needed, after all.