People have different motivations for creating an estate plan. Some want to make sure that their house or business will pass to a specific person. Others worry about estate taxes or naming a guardian for their child. However, one of the most common reasons for people to create a comprehensive estate plan or last will is concern about probate court.
When an estate goes through probate court, it can take months or even more than a year before the executor can finally distribute property to the beneficiaries of the estate. Also, the estate will have to pay court costs and lawyer fees, which might drastically diminish the value of the estate as a whole. In addition, the probate and administration of the estate are public so that the deceased person’s assets and distributions to his or her beneficiaries and charities are public. Raising the question of whether you structure your estate in a way that allows you to completely avoid the cost, time delays and publicity of probate?
When must an estate go through Minnesota’s probate court?
Those who are residents of Minnesota, as well as non-residents who own real property in Minnesota, may need to have their estate probated.
The net value of the probate estate and the type of property the probate estate includes will directly affect whether or not the estate must go through probate.
The financial cut-off for probate court is $75,000. If the total net value of the probate estate is $75,000 or less, it may be possible to bypass probate proceedings. However, if the net value of the probate estate is even a little bit over the cut-off, the estate must be probated.
Even if the net value of your probate estate won’t reach the financial requirements for probate, the type of property contained in your probate estate might still require your estate to be probated. If your probate estate contains any type of real property, even if it is a single unimproved acre of land worth only a few thousand dollars, then your estate must be probated.
Are there options for people with real property or large estates?
Just because the value of your estate or its contents potentially requires probate proceedings doesn’t mean your estate must be probated. There are potential ways for you to avoid probate.
There are a number of probate avoidance strategies or techniques available for you to use to enable your estate to avoid probate. One potential strategy is to arrange for some of your property to transfer at the time of your death to others. Another potential technique is to create a trust while you are living and to fund it with your biggest accounts and real property. Another potential strategy is to change the way you hold title on real estate. The sooner you sit down to evaluate your property and your legacy wishes, the easier it will be for you to create and implement an estate plan that helps your estate avoid probate.