What Assets Go Through Probate in Minnesota?

Probate is a legal process that occurs after someone passes away, during which their assets are distributed to heirs and creditors are paid. In Minnesota, as in other states, not all assets are subject to probate. Understanding which assets go through probate can help families and estate planners streamline the process, minimize expenses, and reduce delays. This guide breaks down the key aspects of probate in Minnesota and explains which assets are included in the probate process.

What Is Probate?

Probate is the court-supervised process of distributing a deceased person’s assets. It involves validating the will (if one exists), settling debts and taxes, and transferring the remaining property to the rightful beneficiaries.

The probate process ensures:

• Legal validation of the will.
• Identification and valuation of the deceased’s assets.
• Payment of debts, taxes, and administrative expenses.
• Distribution of assets according to the will or state law (if no will exists).

In Minnesota, probate is governed by state law. For more details, you can review the Minnesota Probate Code.

Which Assets Go Through Probate in Minnesota?

Assets that go through probate are those owned solely by the deceased person and not otherwise transferred by a designated beneficiary or joint ownership arrangement. These assets typically include:

1. Solely Owned Real Estate
   • Real property owned solely in the deceased person’s name without any joint owner or beneficiary designation is subject to probate.
   • Example: A house owned only by the decedent without a transfer-on-death deed.
2. Bank Accounts Without Beneficiary Designations
   • Checking, savings, and money market accounts held solely in the decedent’s name without a payable-on-death (POD) designation will go through probate.
3. Vehicles Registered Solely in the Decedent’s Name
   • Cars, boats, and other vehicles not jointly owned or lacking a transfer-on-death registration. Note that if the only asset is a motor vehicle titled in the decedent’s name, even if the vehicle is worth more than $75,000, it can often still be transferred without the need for probate.
4. Business Interests
   • Sole proprietorships or ownership stakes in businesses where no succession plan or beneficiary arrangement exists.
5. Stocks, Bonds, and Investment Accounts
   • Investments without transfer-on-death (TOD) or payable-on-death (POD) designations.

Non-Probate Assets in Minnesota

Non-probate assets are transferred directly to beneficiaries or joint owners and do not require court supervision. Examples include:

1. Jointly Owned Assets
   • Real estate or bank accounts owned with rights of survivorship automatically transfer to the surviving owner(s).
2. Assets with Beneficiary Designations
   • Life insurance policies, retirement accounts (e.g., IRAs and 401(k)s), and annuities with named beneficiaries bypass probate.
3. Transfer-on-Death (TOD) and Payable-on-Death (POD) Accounts
   • Bank and investment accounts with TOD or POD designations transfer directly to the named beneficiary.
4. Trust Assets
   • Property placed in a revocable living trust avoids probate, as the trust owns the assets, not the individual.

Simplified Probate Procedures in Minnesota

In certain situations, Minnesota law provides simplified procedures to handle probate assets, particularly for small estates.

1. Affidavit for Collection of Personal Property
   • If the total value of the probate estate is $75,000 or less and does not include real estate, heirs can use an affidavit to claim the assets without formal probate.
   • Learn more about the affidavit process here.
2. Summary Administration
   • Estates that qualify for summary administration, such as those where all property is exempt from creditor claims, may bypass formal probate.

How to Avoid Probate in Minnesota

Many families prefer to avoid probate due to its time-consuming and costly nature. Here are strategies to consider:

1. Establish a Revocable Living Trust
   • Transferring assets into a trust ensures they are distributed according to the trust terms, avoiding probate.
2. Designate Beneficiaries
   • Ensure life insurance policies, retirement accounts, and financial accounts have up-to-date beneficiary designations.
3. Use Transfer-on-Death Deeds
   • Minnesota allows transfer-on-death deeds for real estate, which pass property directly to a named beneficiary upon death.
4. Joint Ownership
   • Holding property as joint tenants with rights of survivorship ensures it transfers to the surviving owner without probate. Be careful with joint ownership as there are many risks associated with owning property jointly with others.

Why Understanding Probate Matters

Understanding probate in Minnesota can:

• Help families plan their estates more effectively.
• Reduce stress and expenses for surviving relatives.
• Ensure assets are distributed according to your wishes.

If you’re unsure about your specific situation, consulting with an experienced probate attorney is recommended. You can find qualified attorneys through resources like the Minnesota State Bar Association.

Conclusion

In Minnesota, probate applies to assets solely owned by the deceased without joint ownership or beneficiary designations. By understanding what assets go through probate and exploring strategies to minimize it, you can ensure a smoother transition for your loved ones. Whether through creating a trust, designating beneficiaries, or using simplified procedures, proactive planning is key.

For more information on estate planning and probate in Minnesota, visit the Minnesota Judicial Branch’s probate resources.