Minnesota Probate Laws | The Meaning of a “fiduciary”

Posted on May 6, 2015 by jlawyer

Many of my clients have questions about the meaning of the word “fiduciary” as it applies to probate law.

The definition and discussion often revolves around Minnesota probate and or Minnesota trust law. For this article I will discuss the definition as it applies to personal representatives and Minnesota probate (although the general rules apply in all cases).

Minnesota Probate Law

Minnesota statute 524.3-703 provides the legal definition of a fiduciary in terms of Minnesota probably law. Below are the pertinent portions of the statute:

524.3-703 GENERAL DUTIES; RELATION AND LIABILITY TO PERSONS INTERESTED IN ESTATE; STANDING TO SUE.
(a) A personal representative is a fiduciary who shall observe the standards of care in dealing with the estate assets that would be observed by a prudent person dealing with the property of another, and if the personal representative has special skills or is named personal representative on a basis of representation of special skills or expertise, the personal representative is under a duty to use those skills. A personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of any probated and effective will and applicable law, and as expeditiously and efficiently as is consistent with the best interests of the estate. The personal representative shall use the authority conferred by applicable law, the terms of the will, if any, and any order in proceedings to which the personal representative is party for the best interests of successors to the estate.

. . .

As you can see, the definition of a fiduciary and what the fiduciary duties are in a probate are clear and well defined. Basically, a fiduciary is a legal definition of a person was been appointed to care for the property and legal rights of another. This is a very serious position which should not be taken lightly.

Violation of fiduciary duties

If the personal representative of the probate estate is not following Minnesota law, that person can be held personally liable for any mistakes, fraud, or misrepresentations that may have been committed. The people holding the personal representative accountable are often the heirs, beneficiaries, and or creditors of the estate. Failing to comply with the law as it defines a fiduciary is a sure way to be sued. Some common examples of failures of a personal representative include:

failing to properly notify creditors of estate debts
failure to properly account for estate assets,
failure to file an accurate inventory and/or final accounting
failure to notify heirs of their rights
not paying taxes of the deceased person in a timely fashion

In my estimation, as an attorney was been practicing probate law for a number of years, the personal representative duties are often rather obvious, unfortunately, some individuals are unable to meet the standard of caring for others. This is unfortunate.

Minnesota probate attorneys lawyers

If you find yourself in a situation we have questions about your fiduciary duties as a new personal representative, or if your questions about a person representative who is not doing his or her job, contact the probate lawyer at Flanders Law Firm LLC, 612-424-0398.

7 Initial Duties of a First-Time Minnesota Personal Representative

Posted on October 22, 2014 by jlawyer

What are the initial steps to take as a first-time personal representative in Minnesota? The attorneys at the office are often asked what to do next when someone has lost a loved one. This is a difficult time for many peoples and we have noticed that people simply do not know what to ask or where to start.

There is some good news: it may not been necessary to do anything with the deceased person’s estate if the total value of the estate is under $50,000. This means that it would be a small estate and would therefore be administered by an Affidavit for Collection of Personal Property. However, if the estate is worth more than that, a personal representative will need to be appointed by a probate judge.

7 Initial Steps of the Personal Representative:

There are certain things a person should do first when their loved one dies. These tasks include:

locate all assets of the deceased person
locate all debts of the deceased person
obtain the certificate of death from the county in which the person passed-away
determine whether not the deceased person had a Will or other estate planning documents such as a Trust
locate and contact all of the known heirs of the estate including the surviving spouse (if there is one)
locate the contact information for all creditors of the deceased person
schedule a consultation with a Minnesota probate attorney

Again, at times, a probate may not be necessary. If the estate is very small, a lawyer may not even need to be involved.

What to expect from a consultation with a probate attorney

In every consultation I do with a client, I am looking for information on the deceased person’s assets and debts. I will also ask for all personal identifying information on the deceased person; including: full legal names, dates of birth, social security numbers, and other personal information.

Once an attorney gathers the personal information for the deceased, the attorney will consider what assets may be exempt from creditor claims and what assets are available to pay estate debts. Estate debts may include such things as funeral expenses, expenses of last illness, and other bills.

After the attorney determines what the expenses of the estate are, the attorney will consider the possible distribution of assets (money) to the heirs and other beneficiaries of the estate. This could be a large lump sum or, at times, the estate may be insolvent (meaning there may be no money).

If the estate is insolvent, it may still be necessary to conduct a probate administration to transfer title of a home or other real estate. When real property or homes are titled in the name of the deceased person, is often necessary to “clear title”. This means that, in the state of Minnesota, the county recorders office will have to be notified of the probate estate and that the personal representative has been appointed so that he/she now has authority to transfer title to real estate. This is a complicated legal issue and a lawyer should be consulted if you have questions.

Free Initial Consultations

Contact the Flanders Law Firm today. The firm employs Dakota County Minnesota probate attorneys. The firm offers free consultations to all potential clients. Call (612) 424-0398.

What are the fiduciary duties of a Minnesota personal representative?

Posted on October 10, 2014 by jlawyer

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.