MANAGING ASSETS AFTER A DEATH: A PROBATE PRIMER

After the death of a loved one, you and your family members will have questions. Do we need to go to probate? We all agree, so are there things we as a family can do to avoid probate? We do not all agree, so who’s in charge? How do we find answers to our probate questions? Wait, what even is probate?

To Probate or Not to Probate

After a death, the deceased person’s assets must be managed in one of three ways, or most often a combination of three ways: 1) according to pre-death agreements; 2) according to the terms of the deceased person’s Will; or 3) according to Minnesota law. Payable on death accounts, transfer on death deeds or titles, life estates, beneficiary designations on investments or insurance, and trusts  are all examples of pre-death agreements.

The term “probate” most often refers to the probate court and “going to probate” means that your family needs the probate court’s assistance to carry out the terms of pre-death agreements, the terms of a Will, or Minnesota law. At the same time, it is often possible to carry out the terms of pre-death agreements, the terms of a Will, or Minnesota law without the probate court’s assistance. So, simply having a Will or making a pre-death agreement does not mean that your family automatically will or will not go to probate. Whether or not your family will go to probate depends primarily on your deceased loved one’s assets, and the plan (or lack of a plan) your loved one had in place prior to death. There is nothing you and your family can do after the death to yank out of probate an estate that is otherwise headed to probate because of your deceased loved one’s plan (or lack of a plan). In fact, anticipating and planning for probate is often a good estate planning strategy. Planning for probate can be a particularly helpful strategy for a parent of young children, a spouse who wants to provide for a surviving spouse while mitigating or avoiding estate taxes, and a careful planner who wants to give family members clear real estate buyout options and directions for getting along fairly in the future.

Taking Charge

So, who is in charge? The answer is different depending on which of the three ways of managing assets you are dealing with. For pre-death arrangements (i.e., payable on death accounts, transfer on death deeds or titles, life estates, beneficiary designations on investments or insurance, and trusts), the pre-death arrangement itself will determine who is in charge. So, for example, the person named on a payable on death account is in charge of collecting that account and the person named as the grantee beneficiary on a transfer on death deed is in charge of getting title to the property. For a Will, the person named as the personal representative or executor is in charge. And when nobody else is in charge, Minnesota law steps in to provide a hierarchy of people who can take charge beginning with the surviving spouse, going on to children and close relatives, and ending with creditors or anyone else who has an interest in making sure things get taken care of.

But, things happen. What if the person in charge has already died? Or is incompetent? Or what if you as a family member think that person won’t do a very good job? Or what if the person in charge isn’t doing anything? The probate court can step in to help families sort through these issues and get somebody appointed to carry out the deceased person’s plans.

First Steps

An attorney can help you figure out whether or not your deceased loved one’s plan (or lack of plan) means that your family is headed to probate. There are some reasons to contact an attorney right away. Disagreement about who is in charge (perhaps even at the point of funeral planning), assets that need to be immediately secured, or transactions the deceased person had started but not completed prior to death are all situations where you should engage an attorney sooner rather than later. But more often, managing the deceased person’s assets can take second priority to family things. And you might find that you don’t need to meet with an attorney at all. This is often the case when the only assets to be managed are governed by pre-death arrangements and there is clarity in those pre-death arrangements about who is in charge. In those cases, take a wait-and-see approach. Wait to see exactly what assets you are dealing with and whether the management is straightforward. Wait and call an attorney only if you need help or unusual issues arise.

When you do call an attorney, bring whatever information you have about the assets that need to be managed (investment statements, abstracts of title, bank statements). Also bring information about your deceased loved one and the plan (or lack of plan) he or she had. Basic information about the rest of the family will also be helpful. And if you do not have any of this information, the attorney will pose some strategies for getting it.

Most importantly, take a breath and relax. Then contact Blethen Berens to help you manage assets after a death, and for all your other legal needs. Our experience not only in probate but also agricultural law, estate planning, real estate, business, and litigation makes us uniquely suited to handle a variety of probate needs. Our team approach means we match clients with the right attorney to achieve the best results in the most efficient way. The attorneys at Blethen Berens are professional, yet compassionate and approachable. We answer basic questions and complex questions with the same client-focused attitude.