Minnesota probate attorney fees, how much do they cost?
The law firm charges varying attorney fees on Minnesota probates.
The complexity and work involved in the probate dictates the cost of the estate administration. There are many different types of probates, including: informal, formal, unsupervised, and supervised administrations.
At times, the attorney fees will be much less because all that needs to be transferred is one asset. In this case, there will be minimal effort involved in the transfer that asset in the probate. Common asset transfer situations, which have lower attorney fees, include the transfer of title to a home, or liquidation of a single stock, insurance, or other investment assets from the name of the deceased person to their heirs and beneficiaries.
Examples of Minnesota probates with higher attorney fees include the estates which need to be administered from date of death to distribution of assets. This would include: payment of creditor claims, publication of notice in the newspaper, negotiation of contested issues, payment beneficiaries, starting an estate bank account, paying taxes, etc. These duties can be very time-consuming and must be done correctly or liability for the personal representative and/or the attorney will be involved. In these cases the attorney fees are often much higher than many people may like.
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The firm works with individuals with the estates worth less than $50,000.00 and with the estates worth millions of dollars.
Different law applies to different estates. For further questions about Minnesota attorney fees in Minnesota probates, contact Flanders Law Firm LLC at 612-424-0398.
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.
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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.
An important case was issued recently out of the Western District Court for the Western District of Pennsylvania, United State v. Stiles, No. 2:13-cv-00138.
This case provides and excellent explanation for why people should not administer estates (especially large ones) without the help of a lawyer.
Facts of the Case
Julia Stiles died in 2002. Her son was appointed executor (personal representative) of her estate (it is not clear whether he did so with the use of an attorney or not).
The tax return for the estate was not filed until June of 2008. On June 9, 2008, a representative of the Secretary of the Treasure Internal Revenue Service of the United States (IRS) assessed federal income taxes, interest, and penalties against the estate in the amount of $2,093,091. That is a lot of money in taxes.
The real property in the state of Delaware was sold in August 2002, for $379,000. Once the property was sold, the proceeds were distributed to the heirs shortly after the sale. The IRS did not receive any proceeds from the sale of the property.
Between 2002 – 2005, the son distributed approximately $775,000 from the estate to himself, and $425,000 to each of his two sisters. At the start of April 2008, the estate’s investment account was worth $1,787,660. In April of 2008, David Stiles distributed $110,635 from the estate to the Delaware Division of Revenue.
The IRS can Charge Interest on Late Payments
The IRS presented evidence to the court that interest was owed on unpaid income taxes. Interest on the income tax assessments is assessed under 26 U.S.C. 6601(a) and (b) from the date that the Stiles’ tax liabilities became due at a rate set forth in 26 U.S.C. 6621(a). Penalties are also allowed by federal law.
The law on failing to pay estate taxes
The IRS in this case filed for a summary judgment. In essence, this means that the IRS felt that the Stiles had not cognizable defense. The court agreed.
In seeking to foreclose its tax lien on the estate, the IRS argued in its summary judgment motion that there was a prima facie assumption of tax liability. Therefore, since the government had arguably met its burden, the Stiles had to file a responsive statement of facts. They did not do so – ostensibly because they did not appear to be represented by counsel.
Personal Representative Liability Law
The personal representative of the estate also argued that the estate was now insolvent and therefore the IRS could not foreclose in its tax lien.
The IRS argued that, because the personal representative of the estate was a fiduciary that it could hold him personally liable for the tax debt. The IRS cited law which provided that:
“Personal liability can attach, to the extent of the distribution, if the government establishes three elements: (1) the fiduciary distributed assets of the estate; (2) the distribution rendered the estate insolvent; and (3) the distribution took place after the fiduciary had actual or constructive knowledge of the liability for unpaid taxes.” United States v. Tyler, No. 10-1239, 2012 WL 848239, at *10 (E.D. Pa. Mar. 13, 2012). “
The court agreed with the IRS’s argument and found the personal representative liable for a tax debt in the amount of
What is even more confounding is that the personal representative admitted that he knew about the tax liability:
David Stiles admitted, through testimony, that he knew in 2002 about the estate’s federal tax liabilities. (ECF No. 35 ¶ 17); see Estate of Stiles, 2011 WL 5299295, at *6 (“[David] Stiles testified at trial that he knew as of 2002 that estate taxes would have to be paid in addition to the yearly fiduciary income taxes, but he made no affirmative efforts to pay those taxes or learn of the deadlines by which they should have been paid.”). On June 18, 2003, during a telephone call with his lawyer, David Stiles was informed that the estate’s tax returns were late. Estate of Stiles, 2011 WL 5299295, at *6. Based on the record before the court, David Stiles knew about the estates’ tax liability, at the latest, on June 18, 2003. David Stiles continued to distribute assets out of the estate through 2006.3 (ECF No. 35 ¶ 19.) The record before the court shows that David Stiles had knowledge of the estate’s tax liability and continued to distribute assets out of the estate rendering it insolvent. See Tyler, 528 F. App’x, at 200-02.
Finally, it appears that the personal representative was relying on a defense of bad legal advice. The court also did not find this argument compelling, providing that: “Relying on the poor advice from an attorney is not a defense. It is unfortunate that the Stiles received poor legal advice; however, poor advice does nothing to mitigate their liability for the decisions David Stiles made in managing the estate.”
Seek out competent legal counsel
Having experienced, competent probate attorneys for a Minnesota probate is a must. Personal liability is very real and must be taken seriously by all potential personal representative.
For further information, contact Joseph M. Flanders at 612-424-0398.
In every probate administration, the personal representative will be required to gather all assets and debts and compile a document called an Inventory.
While “inventory” is the correct legal word to use, the legal basis for drafting the document and filing it with the court is that an accounting of the assets and debts of the estate must be done.
Inventory and assets and debts of the probate estate
The Inventory will be sent to all interested parties in the estate. Interested parties include: heirs, descendants, surviving spouses, specific devisees, and all creditors of the estate.
People often understand that heirs of an estate are entitled to something. However, it has been my experience that people may not understand that creditors are also entitled to review the inventory. Creditors include credit card companies, mortgages, contracts of the deceased person, or any other party to which the seas personal money too. If the deceased person owed money to someone, it is logical to see why that person would be entitled to a review an estate Inventory.
We have talked about what the legal meaning of assets and debts are in many pretty previous posts. We have also discussed what probate estate exemptions may apply in Minnesota. Please click on the prior posts for further information on those two topics. If there are exempt assets, this means that creditors may not get paid. If you have further questions about what may or may not be exempt, talk with a probate lawyer.
The Personal Representative’s Responsibilities
The personal representative of the estate, is required to draft an inventory, send copies to all interested parties, and file the document with the proper county court where the deceased person died. We’ve also discussed what the proper county court is in the state of Minnesota and prior articles.
There may be an informal, unsupervised administration or a formal supervised administration. How something is filed will dictate many of the required court filings and how the court supervises the personal representative’s actions. Again, for further questions on what unsupervised and supervise more formal and informal administrations mean, a probate lawyer should be contacted.
In essence, it is been my experience that personal representatives may not understand the requirement of reviewing all of the deceased person’s debts and assets, compiling those that information in an Inventory, and sending that Inventory to all interested parties. This, in essence, defines the why the probate process is necessary and it is very important function of the Minnesota probate court system.
For Further Information on Probate Inventories
Flanders Law Firm LLC has Minnesota probate attorneys waiting to answer your questions. For further information on probate inventories and probates in Minnesota, contact the law firm at 612-424-0398.
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
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.
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Minnesota probate attorney fees, how much do they cost?
