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August 2009
As an estate planner, one of the biggest misconceptions I hear from people during office conferences is that they do not expect to need a probate because they have a Will. A Will does not help your estate to avoid probate, nor does a Will guarantee a probate. A Will is simply directions should your estate need to be probated. The determination as to whether or not an estate will be probated is based on the quantity and classification of assets which you own.
A probate is a court administered process by which creditors of your estate are paid and your assets are distributed to your heirs. Probate assets include any assets which are titled in just your own name, with no joint owners or beneficiaries. If you hold any real estate without a joint owner, which is not interest that automatically passes to beneficiaries, a probate will be required for your estate. Also, if you own any personal property, with no joint owners or beneficiaries designated, in excess of $50,000.00, a probate will be necessary.
One of the easiest ways to avoid a probate for real estate is to hold it in joint tenancy. This is most commonly the case among spouses. Joint tenancy means that upon your death your interest in the property automatically passes to the other joint tenant. With regard to financial instruments (such as life insurance, bank accounts, annuities, or retirement accounts) beneficiaries may be designated so that at the time of your death the asset passes automatically to the beneficiaries listed.
Trusts allow you to create a vehicle prior to your death into which you can transfer property. Ownership is then vested in the trust, which has a continuing existence and does not die, and therefore does not require a probate. The terms of the trust may specify at what times and to whom the assets held in the trust are to be distributed. To retain the right to use or to continue owning your property during your lifetime you may utilize options such as Life Estate Deeds or Transfer on Death Deeds.
You should consult with an estate planning attorney to determine the tools which will most effectively meet your goals. Always keep in mind that while a Will is a very effective estate planning tool, it is not a tool that will assist you in avoiding a probate in Minnesota.
Stefanie Brown practices in the areas of corporate, real estate, residential construction, and estate planning.
© 2009 Rinke-Noonan.
This article is a general discussion of legal issues and is not intended to be legal advice. We would be pleased to review the specific facts and law regarding any given legal matter.
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