Contesting a Will in Minnesota | Common Will Contest Do’s and Dont’s

Posted on June 18, 2018 by jlawyer

Contesting a Will in Minnesota

If you have written a will or are thinking about doing so, you likely want to be sure that it’s done well. After all, the goal of a will is to ensure that your wishes are honored when you’re no longer around.

If a will is found to be invalid, it could mean that your wishes are altered or ignored entirely, throwing your carefully crafted plans into doubt. To avoid having your will invalidated, keep the following issues in mind.

Coercion

Wills can be invalidated if it is found that the person who created the will (known as the testator) was coerced or created the will under duress. This coercion can take many forms, but if the end result is that the testator felt forced into creating the will or drafting it in a certain way, it is likely to be found invalid.

Fraud

Fraud is a pretty clear reason for a will to be found invalid. If a will has been tampered with or altered in some way, then a court will likely rule that it has been invalidated. It’s for this reason that it is important to ensure that any changes made to the will are executed properly.

Lack of capacity

A common reason why wills are challenged has to do with the testator’s mental capacity. If the person creating the will is not of a sound mind, then any document he or she drafts or signs will not be found valid. Judges will scrutinize claims concerning lack of capacity as they want to ensure that those with diminished capacity are not preyed upon by greedy relatives.

Improper Execution

A final reason why a will may be found invalid is if it was improperly executed. In Minnesota, a will must be in writing, it must be signed by the testator or by someone else in the testator’s presence and at the testator’s direction, and it must be signed by at least two witnesses within a reasonable time of witnessing the testator’s signing. If the will was executed any other way, you run the risk of a legal challenge.

What if you want to prevent a challenge before it starts?

If you’re in the process of drafting a will and want to do everything possible to avoid loved ones contesting the will down the road, what should you do? First things first, do everything you can to avoid invalidating the will. Assuming you’ve checked those boxes, another thing to consider is including a no-contest clause in the will. What does this do? Though it does not guarantee that no one will challenge the will, it does work to seriously disencourage heirs from doing so. The clause works such that anyone who has challenged a will is automatically disinherited. It means that fighting to get more may instead lead to getting nothing at all.

Minnesota Will Contest Lawyers

An experienced Minnesota probate lawyer can help walk you through the probate process, answering questions along the way. 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.

Posting a Bond in a Minnesota Probate

Posted on March 6, 2018 by jlawyer

Bonds and MN Probate

In some estate the law firm has worked on, the personal representative has been required to post a bond. This post explains (1) what a probate bond is and (2) why one might be required.

A Probate Bond

In some cases, the court may require the the personal representative (executor) of the estate post a bond equal to the amount of the estate assets. Therefore, if the estate is worth $500,000.00, then the court could require a $500,000.00 bond. Why? Because the court wants to ensure that the personal representative does the right thing, follows the law, and doesn’t lose or worse, steal the money from the estate.

A bond is surety posted by the personal representative against the estate assets. The personal representative will literally have to post collateral against the bond in case they make a mistake in the estate. This is a bid deal and something people should take very seriously.

Why Might a Probate Bond be Required?

In formal, supervised administration in Minnesota, a bond is almost always required. However, most estate are not formal and supervised by the court. In fact, I would guess that only around 10% of estates proceed in this fashion.

Therefore, the question becomes: why is a bond required in this minority of estates? One reason for a bond is that there may be family members or other parties that are “fighting” and the personal representative must post a bond to preserve assets. Many times, when heirs and other parties are fighting a professional personal representative will be appointed by the court. A professional must always be bonded and the estate will always be a formal, supervised estate.

Another instance when the law firm has seen bonds required is when the estate is insolvent. For instance, the estate may have a home, but there are debts worth more than the home. In essence, the court may require a bond so that the creditors of the estate are protected. It is easy to see why a party might not want to sell a home or other assets just to be the deceased person’s bills. After all, what fun is that? Yet, the court might require a bond in this case.

Finally, the last common instance when a bond is required is when the deceased person gave money to people under the age of 18. In this case, the court will likely want to ensure that the children receive the money they are owed. Courts treat children very carefully because they are not legally able to represent themselves.

Minnesota Bond Lawyers

The law firm has attorneys with years of experience dealing with probates of all kinds. If you have questions about the requirements of a bond or other probate issues, contact the law firm today at 612-424-0398.

When is a probate required in Minnesota?

Posted on January 3, 2018 by jlawyer

When is Probate Required?

Probate is required when a deceased person owned assets in his/her name alone at the time of their death, and those assets were worth more than $75,000.

Furthermore, when there is real estate (a home) that belonged to the deceased person in his/her name alone, a probate will always be required – even if the value of the property could arguably be less than $75,000. This is because the title to the property will not transfer to a new buyer without court supervision of the probate process.

The next question you might have is, what is probate?

The probate process is, generally, the legal process by which a personal representative (executor) is appointed and that person is responsible to do a number of tasks on behalf of the estate:

– Collect, inventory, appraise, and distribute assets pursuant to a Will or by the laws of intestacy;
– Pay the valid, non-exempt, debts of the deceased;
– Protection of the estate assets;
– Finally, making distributions and accounting to the court.

The above process is not all inclusive. Every deceased person’s estate is different. A probate attorney should always be consulted with.

What if there was a Will?

A common misconception is that a probate is not necessary if a person had a Will. In many cases, this is simply not true. If someone dies and they have a Will, the determining factor are assets worth more than $75,000 in the deceased’s name alone. We discussed this above. In essence, a Will is only an instruction by the deceased as to how they want their assets passed to their loved ones or charitable institutions. It does not change the legal assets, debt, and real property issues discussed above.

Informal versus Formal Probate

The differences between an informal probate and a formal probate are, mainly, that an informal probate often does not have court supervision. The formal probate does.

What are some circumstances when a informal probate will not be allowed by a court:

– the estate has more debts than assets (insolvent)
– there are unknown heirs or hard-to-locate heirs
– the Original Will cannot be found
– there is a disagreement among the heirs or devisess;
– if there are minor heirs
– if there is a medical assistance claim by the State of Minnesota.

There are other reasons why an informal administration may not be allowed. For further questions on that issue, you should consult with an experienced probate lawyer.

Minnesota Probate Attorneys

For more information about when a probate is required, please contact Joseph M. Flanders at Flanders Law Firm LLC at 612-424-0398.

Collecting a Debt in a Minnesota Probate | What Happens If Someone Who Owes You Money Passes Away?

Posted on January 3, 2018 by jlawyer

If someone passes away while owing others money, it’s an unfortunate circumstance of everyone involved. The people owed the money may fear that they won’t see the return of the money they loaned out.

The loved ones of the deceased will be grieving and the last thing they want to worry about is a bill. Though it’s a difficult situation, the reality is that people pass away every day while owing money to others and the law has thankfully adopted a process for dealing with such claims.

Will you ever get the money back?

Though it would be nice to give a resounding “Yes!”, the honest answer is more complicated. Though you might get every dime that you’re owed back, you might also get nothing. The reality is that it depends entirely on the financial situation of the person who passed away. If he or she owed lots of people lots of money and had little in the way of assets, it is possible you will not ever get the money you are owed back. If, on the other hand, the person owned property, like a house and cars, and had a small amount of debt, the estate of the person will likely have the necessary funds to repay the money that is owed.

Are family members responsible for a loved one’s debts?

Absolutely not. This is an important point that can cause some confusion. While you may be owed the money by the estate of the deceased, you are not owed the money by his or her relatives. Unless those relatives were signatories to the loan, they have no legal obligation to use their money to repay any debts owed by the estate of a loved one. The money is owed exclusively by the estate and if there isn’t enough money in the estate to go around, no other parties, including the executor, will be liable for paying the remainder.

Who has the responsibility of paying money owed?

Though the estate owed the money, the estate’s actions will need to be carried out by a person. So who is the person that pays the bills? Debts of an estate are managed by the person designated in the deceased’s will. This person, the executor of the estate, is often a spouse, a child or a close family friend. This person is tasked with performing an accounting of the estate, to see how much is owed and then distributing assets to pay any debts. Anything that remains, will be given to the heirs.

How much time do you have to collect money owed?

In Minnesota, the answer is not very long. Section 524.3-803 of Minnesota Statutes discusses the time allotted for creditors to file notice of their claims against an estate. The law says that in cases where proper notice to creditors is published, the creditors have no more than four months after the date of publication to bring their claims. In cases where notice was not filed, creditors have at most one year after the decedent’s death to raise their claims. The goal is to wrap the process up quickly, meaning if you are owed money you need to move fast to stake your claim.

Collecting a Debt in a Minnesota Probate

An experienced Minnesota estate-planning lawyer can help walk you through the probate process, answering questions along the way. 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.

Do I have to probate a Will in Minnesota? | Is probate necessary?

Posted on October 26, 2017 by jlawyer

Minnesota Probate Law | Is probate necessary?

We talk a lot about strategies that can be employed to avoid or minimize the hassle of probate. After all, ensuring that a family spends as little time and money as possible in probate court is better for everyone involved. Though those who spend time and effort planning can avoid probate, what about those who haven’t devoted the same kind of energy to the issue? In an ordinary case of a spouse dying and leaving everything to his or her partner, what happens then? Do I have to probate a Will in Minnesota? To find out, keep reading.

Let’s set the scene. An ordinary couple, both older. They have some bank accounts, a house, cars and some personal property. They aren’t wealthy, but they aren’t destitute either. They spent some energy planning – they both had wills written – but that was years ago and they weren’t terribly detailed, simply leaving everything to the other spouse. If the wife passes away, from a probate perspective, what happens next?

Do I have to probate a Will in Minnesota?

First, does a will mean that probate can be avoided? Unfortunately not. Though the will can be enormously helpful in speeding up the probate process, it does not prevent it from happening. The court will likely want to validate the will, ensure that it is legally enforceable and that it was properly executed. Though it is a crucial estate planning tool, it isn’t powerful enough, on it’s own, to escape the need for probate.

Next, let’s talk about the goal of probate. Probate is designed to ensure that your financial obligations are dealt with appropriately and your remaining assets are distributed to heirs in accordance with your desires. So does that mean that probate must happen in each and every case? No it does not. Probate is only required in those instances where ownership of an asset needs to change.

In our example, what happens next depends on what the wife owned and/or owed. If she has a number of debts, probate will almost definitely be required to ensure that the woman’s estate pays creditors as required. The same is true if the woman has a number of assets in her name. Even if her will leaves everything to her husband, the probate process can still be required to effectuate these transfers.

Debts and Assets

What if, instead of having debts and assets, the woman has virtually nothing in her name? Let’s pretend that the couple was married for decades, but the woman was content to let her husband manage financial matters. He put the cars in his name and the banks accounts too. In that case, probate may not be required as there is no property that must change ownership. The items are already in the husband’s name and thus there is no requirement that he begin the probate process.

Minnesota Real Estate

One potential snag in the plan of probate avoidance is the marital residence. If, by chance, the husband purchased it prior to marriage and it is thus separate property, there may still be no problem. If, on the other hand, the two bought the house during the course of their marriage using joint funds, then it is possible his wife has formed an ownership interest in the property, especially if the couple lives in a community property state. In that case, probate may be required if the husband ever wants to sell or refinance the house.

Minnesota Small Estate and Probate

Another bit of good news is that in Minnesota, there is a small estates limit written into the law making it easier and quicker for those without many assets to move through the probate process. Rather than submit to a formal probate court hearing, you can simply fill out a form and wait a certain amount of time before distributing assets. The goal is to speed things along and prevent wasting money on court fees. The law says that the affidavit can be used if the probate estate is less than $75,000.

Minnesota Probate Attorneys & Lawyers

Minnesota Insolvent Estate Law

Posted on October 23, 2017 by jlawyer

What happens when an estate runs out of money?

When most people think of an executor’s job they imagine presiding over the distribution of a number of assets, money, personal items, even real estate. Though this is certainly true in some cases, it does not fully capture an executor’s role. He or she does not only distribute money to heirs, but must also distribute money to pay debts of the estate.

The hope is that there are enough assets to cover any liabilities, leaving something left over for family and friends, but sometimes that isn’t the case.

What happens then? To learn more about what happens when there simply isn’t enough money to go around, keep reading.

First, let’s back up as it’s worth mentioning that one of the primary duties of an executor is to pay the debts incurred by the person who passed away. Though the person is no longer around to pay the bills, his or her estate becomes legally responsible for debts entered into during the decedent’s lifetime.

What are some common examples? If the person owes money for housing, either a mortgage or rent, those payments will need to be made. The same is true if the decedent owed money for child support or alimony. These obligations do not disappear after death. Credit cards, medical bills, auto loans and many other debts must also be paid.

Things to keep in mind

Though executors are obligated to pay debts of the estate, it is important to remember that the estate is only responsible for paying legitimate debts that were created prior to the decedent passing away. If the debt arose after the person’s death it is possible that it will not be held legally enforceable against the estate. Promised charitable donations may also not be found enforceable, as these are sometimes seen as moral, rather than legal obligations.

Something else to keep in mind is that some obligations don’t need to be paid off as the debts are attached to certain items of property. For instance, auto loans follow the vehicle and it’s common for the person who inherits the property to inherit any debt associated with it.

What if the estate is running low on funds?

Unfortunately, in some cases debt has a way of piling up. When that happens, the executor may come to understand that there isn’t enough money to cover all of the estate’s debts. What do you do at that point? Pay bills randomly? Pay those that are screaming the loudest? No. If your estate lacks sufficient resources then you need to seek expert advice as there are specific rules in each state that govern the order of priority for paying creditors.

When is an estate insolvent?

An estate officially becomes insolvent when the estate has more claims (or liabilities) than it has assets to pay them. If that’s the case, then the executor needs to declare the estate officially insolvent. Be sure to work with a local probate attorney to assist with this process as it can be quite complex. If there are revocable living trusts, it is possible that they could be used to pay liabilities, though this will depend on the particular facts of your case.

In Minnesota, the law says that if an estate is insolvent that the following priority will be applied to creditors. First, any liabilities which arise after the death of decedent, such as funeral expenses, attorney fees and estate administration costs must be paid. Second, any federal taxes that are owed must be paid. Third, medical or nursing home expenses for the person’s most recent illness are owed. Fourth, medical or nursing home expenses related to the decedent’s last year of life are owed. Fifth, debts and taxes with preference under Minnesota law as well as state taxes must be paid. After that, all other claims are paid depending on how much money remains.

Minnesota Probate Lawyers

Source: “Insolvent Estates – Who Gets Paid What When an Estate’s Debts Are More Than Its Assets?” by Deirdre R. Wheatley-Liss, published LexisNexis.com.

MN Probate | Can non-probate assets be used to pay an estate’s debts?

Posted on October 19, 2017 by jlawyer

Non-Probate Assets in Minnesota

Last week we discussed what happens when an estate runs out of money. When this happens, an estate is seen as insolvent, meaning the assets are not sufficient to cover the liabilities owed. In these cases, money is distributed according to a pre-established hierarchy and when it runs out, it’s gone. But what happens if there are assets beyond those in the estate? Can they be used to pay off the estate’s debts? To learn more keep reading.

First, why would there ever be assets that are not part of the estate? The reason is because some assets are seen as non-probate assets and pass outside of the probate system. This happens most often with assets that have what are known as designated beneficiaries.

Designated Beneficiary Law

What is a designated beneficiary? A designated beneficiary is someone who was named as the person to whom an asset will pass should he or she survive the decedent. When you list someone’s name as beneficiary on an IRA, 401(k), life insurance policy or bank account, this makes them a designated beneficiary. In these cases, and those involving pay-on-death or rights of survivorship accounts, the assets pass directly to the named beneficiary. This happens entirely outside of the probate process and results from a contract between the decedent and the financial institution. Because no probate court is involved, these are referred to as non-probate assets.

Insolvent Estates

So what happens if an estate is upside down, but there are non-probate assets with money that could be used to cover some of the debts? Are the non-probate assets up for grabs? Surprisingly, the answer is not always so clear. Recently, Texas passed a new law that says that assets from multi-party accounts that pass outside of the probate process are liable for the debts of an estate. The problem is that the Texas law doesn’t do a very good job of explaining how this should work in practice. The issue is that though these funds may be used to pay debts of an estate, the executors may not have any access to the funds as they were lawfully distributed by the financial institutions directly to the beneficiary. Unless the executor acts quickly and notifies the financial institution that funds are in dispute, it may be too late as they money could already be spent. Should that happen, the Texas law says nothing about how the executor should go about recovering money from the rightful beneficiary.

In Arizona, the law is similar. The legislature there said that non-probate assets can be used to pay a decedent’s debts, but only in cases where the estate’s assets are insufficient to cover its liabilities. In those cases, the beneficiary of the non-probate asset would be held legally responsible for satisfying debts up to the value of the money received. That means if a beneficiary received a bank account worth $10,000, he or she could be on the hook to pay up to $10,000 in debts of the decedent’s estate.

Creditor Claims (Debts of the Deceased)

In other states, non-probate assets are seen as not being part of the estate and thus cannot be claimed by creditors, even if the estate is insolvent. According to the Minnesota Department of Revenue, assets that are payable upon death are not part of the state’s probate process. As a result, the DoR goes on to say that named survivors inherit these non-probate assets, which are not applied to the deceased person’s debts. Examples given of such non-probate assets including things like property with a right of survivorship, insurance proceeds, annuities, pensions, retirement accounts and accounts that are payable upon death.