If you recently lost a family member or a loved one, you are undoubtedly going through a period of intense emotions. The practical and legal aspects of your loved one’s death are probably the last things you want to think about right now. It may be, however, that you need to think about them if you were named as the Executor in the decedent’s Last Will and Testament or you appear to be nominated by the family to act as the Personal Representative if the decedent died intestate. In your role as Executor or Personal Representative(PR) of the estate, one of the first questions you may have is “Do I need probate?”
Why Might Probate Be Required?
When someone dies, they leave behind an estate. The estate includes all assets owned by the decedent at the time of death. An estate might be modest and only include some personal belongings and a checking account with very little money in it or an estate could include complex and valuable assets. Regardless of the size and value of the estate, the assets that belonged to the decedent at the time of his/her death must be identified and eventually transferred to the intended beneficiaries and/or heirs of the estate. In addition, creditors of the estate must be given the opportunity to make claims against the estate and any state and/or federal taxes owed by the estate must be paid. All of this occurs during the legal process known as probate.
Do All Estates Go through Probate?
Formal probate is often a lengthy – and costly – process. Along with the fact that the estate’s value can be significantly diminished as a result of the costs of formal probate, the intended beneficiaries of the estate will not have access to their gifts until the probate process is complete. The good news is that your loved one’s estate may not be required to go through formal probate if the estate qualifies for an alternative.
North Dakota & Minnesota Small Estate Alternatives
Like most states, Minnesota and North Dakota offer an alternative to formal probate for small estates that qualify. “Collection of personal property by affidavit” governs North Dakota and Minnesota’s small estate alternative to formal probate. According to the statute, estate assets may qualify for distribution by affidavit if all of the following are true:
- The value of the entire estate subject to distribution or succession under chapters 30.1-01 through 30.1-23, wherever located, less liens and encumbrances, does not exceed fifty thousand dollars, in North Dakota; seventy-five thousand dollars in Minnesota.
- Thirty days have elapsed since the death of the decedent.
- An application or petition for the appointment of a personal representative is not pending or has not been granted in any jurisdiction.
- The claiming successor is entitled to payment or delivery of the property.
When determining the value of the estate assets, keep in mind that not all assets are required to go through the probate process. Certain assets bypass the process and pass directly to the intended beneficiary following the decedent’s death. Common examples of non-probat assets include:
- Trust assets
- Certain types of jointly held property
- Proceeds of a life insurance policy
- Assets held in an account with a “Payable on death (POD)” or a “Transfer on death (TOD)” designation.
Who Can Help You Answer the Question “Do I Need Probate?”
If you have never served as an Executor/PR of an estate, you may still be hesitant to decide whether or not your loved one’s estate requires formal probate or can be distributed using the small estate affidavit instead. The best way to ensure that you make the correct decision is to consult with an experienced North Dakota estate planning attorney as soon as possible.
If you were appointed the Executor of the estate of a recently deceased love one, or volunteered to be the Personal Representative, and you are unsure whether formal probate will be necessary, contact the experienced North Dakota and Minnesota estate planning attorneys at German Law by calling 701-738-0060 to schedule an appointment.