Dakota County Archives - Page 16 of 16

In any Minnesota probate, a personal representative will be appointed to run the estate.

If there are over $75,000 in probate assets, the estate will need to be probated by the personal representative. The assets of the estate will be distributed to the heirs of the deceased person. Distribution can be effectuated by the deceased person’s Will or via an intestate administration. An intestate administration means someone died without a Will. Typically, a person will work with an attorney to follow the law and understand what they must do according to the law.

We often discuss the legal concept of “fiduciary duties” with out clients. The personal representative must serve as a “fiduciary” for all heirs, creditors, and other interested parties.

Fiduciary duties of a Minnesota personal representative?

In a typical probate, the personal representative will have a fiduciary duty obligation to the heirs.

A typical situation my office sees is where the children of the deceased person are the only heirs. In this scenario, the eldest child is often “nominated” by the deceased person to be the personal representative.

The personal representative must pay expenses of the estate and then distribute assets and money to their siblings. While working on the estate, the personal representative owes fiduciary duties to their siblings – whether they like them or not. Sibling rivalry can often get in the way of a proper administration.

It is also important to remember that the personal representative has a difficult job and that the money in the estate does not belong to them.

The personal representative is serving the estate. There are many instances of probate litigation (lawsuits) where the personal representative may not be doing what they are supposed to be doing. When thinking about the term fiduciary duty, please try to remember that it means to be honest and fair with the deceased person’s money.

Duties owed to creditors in a Minnesota probate estate

The personal representative will also owe a fiduciary duty to creditors of the estate. If there is over $75,000 in probate assets, the personal representative is required to distribute assets and pay creditors.

Commonly, the debts of the estate include a mortgage on home, credit-card bills, utilities, and other contractual debts of the deceased person. Sometimes, the estate has very little debt because, as people age, they often pay off the home and other debs.

There are also certain probate asset exemptions which we discussed in previous articles. Exemptions include: the homestead of the decedent, $10,000 of personal property, and one automobile. Life insurance is also an exemption. This means that assets will not be collectible, in most instances, by creditors.

Paying creditors claims is relatively simple. If the personal representative has knowledge of money owed to any person or business, those debts should be paid out of the estate. However, there are also instances when a personal representative does not have knowledge of debts owed by the deceased person. In these instances, the notice of publication – which is published in the newspaper – will be published so that unknown creditors have four months in Minnesota to file a claim against the estate.

It is very important for the personal representative to work hard to discover debts that need to be paid. After payment of debts (minus exemptions), the remaining money will then be distributed to heirs.

As a warning to people who may be considering serving as a personal representative – not paying estate debts is where liability of the personal representative most often arises. This is because, at times, the personal representative may not be diligent in discovering otherwise known creditors. Obviously, this can be a very large problem. The court may hold the personal representative liable for not doing their job correctly.

An personal representative may want to speak with a probate attorney

For further information about the meaning of personal representative duties, and fiduciary duties, contact Joseph M. Flanders, a Minnesota probate lawyer, at 612-424-0398.

The firm offers free initial consultations in all cases.

Minnesota Probate Law | Can you disinherit a spouse?

Though we’d hope it never gets to the point that you want to, it is possible you might be interested in disinheriting a spouse. Is such a thing possible in Minnesota? Fortunately (or unfortunately, as the case may be), spouses can never be disinherited in Minnesota. This is because your spouse has a legal right to his or her spousal share of your estate. This means even if you specifically leave assets to others and change your beneficiary designations, your spouse will still be able to claim a certain share of the value of the estate.

The rule in Minnesota says that a spouse has the right to a percentage of the augmented estate, meaning the value of your assets plus the value of his or her stuff. The percentage is based on a sliding scale and starts at three percent of the augmented estate for those married for only a year. At year 15 the percentage caps out at 50 percent of the augmented estate.

This percentage is guaranteed regardless of what is written in your will and, assuming the spouse has little of his or her own, will guarantee he or she walks away with half of your estate. If that’s a problem, you might want to consider meeting with a Minnesota family law attorney rather than an estate planning lawyer.

Minnesota Probate Law | What about children?

Though it’s hard to imagine why anyone would want to disinherit a child, the reality is that there are sometimes legitimate reasons for such a decision. One example is if there is simply no relationship between the parent and child and including the child in the will would run contrary to the person’s wishes.

A second, and much less depressing situation, is if one child is especially well off financially and does not need the same level of support as other children. By excluding the wealthy child from your inheritance you can leave more to the children who may really need it.

Unlike spouses, children can be disinherited. Doing so may obviously lead to hostility, especially if the disinheritance comes as a surprise. To ease the pain, it may be best to sit down with the family and explain your rationale for the decision early on, giving everyone time to process and, eventually, accept your choice.

How do you go about disinheriting someone?

If you’re looking to disinherit someone, likely a child, there are several ways to go about it. One way is to simply exclude their name from your will and all other documents regarding your estate. Don’t name them as beneficiaries on your life insurance or retirement accounts. Though this approach can work, it can also lead to confusion and unnecessary fighting. If someone is merely left out of a will, it’s possible that they would think it was the result of a simple oversight and could thus lead to a lengthy fight among the heirs.

Rather than allow for so much potential confusion, the better way to go about disinheriting someone is to specifically name him or her in your will and other estate planning documents. By including them by name and then stating that you wish to leave them with nothing, you are eliminating the possibility that this could be contested later on as vague. Your wishes, though harsh, will have been made unequivocally clear.

An experienced Minnesota probate lawyer can help walk you through the complicated process of establishing a workable estate plan. 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.
Source: “Disinheriting someone is not easy,” by Geoff Williams, published at Reuters.com.

Dakota County

What are the fiduciary duties of a Minnesota personal representative?