If you’ve recently lost a loved one in Minnesota, you may be responsible for administering their estate. Estate administration is the process of managing a deceased person’s assets and distributing them according to state law. This can be a complex legal process with many steps involved.
This guide will walk you through the key aspects of estate administration in Minnesota so you can effectively fulfill your duties as an executor or personal representative. We’ll cover the core responsibilities like probating the will, inventorying assets, paying debts and taxes, and distributing property to heirs. With some background knowledge and help from an experienced probate attorney, you can properly handle estate administration from start to finish.
What is the Estate Administration Process?
The estate administration process begins when a person dies and includes several steps. The process can be complex, and it often requires the assistance of an estate attorney. The first step is to file the last will and testament (if there is one) with the probate court. The court then appoints an executor or administrator who is responsible for managing the decedent’s estate.
The executor or administrator must identify and gather the assets of the estate, pay any debts and taxes, and distribute the remaining assets to the beneficiaries as per the will or state law. This process involves filing tax returns, paying estate debts, and distributing the remaining assets to the beneficiaries.
Who Can Serve as Estate Administrator in Minnesota?
Under Minnesota law, the executor named in the last will and testament has first priority to administer the estate. If there’s no will, Minnesota’s intestacy laws determine who can serve as administrator in this typical order:
- Surviving spouse
- Adult children
- Parents or siblings
- Other next of kin
Estate administrators must be at least 18 years old and have no felony convictions. The court also considers the proposed administrator’s:
- Honesty and integrity
- Ability to fulfill duties
- Willingness and availability to serve
Administrators who mismanage estate assets or fail to follow court procedures can be removed from their duties. The probate judge has the discretion to appoint a special administrator to preserve the estate until conflicts are resolved.
What Does an Estate Administrator Do?
When someone dies with a will in place, they typically name an executor in the will who is responsible for carrying out the terms of the will. If there is no will, the probate court will appoint an administrator.
The executor or administrator takes on the role of an estate administrator and has the legal responsibility to manage the estate settlement process. Their main duties include:
Review the Will and other Estate Planning Documents
The first step in estate administration is to locate the original will, trusts, or any other estate planning documents the deceased person created. This will name the executor, outline how assets should be distributed, and provide funeral or burial instructions.
If there is no will, the estate administrator is called an administrator and will be appointed by the probate court. The administrator will distribute assets based on state intestacy laws.
Other important documents to locate include deeds to property, vehicle titles, stock certificates, bank and investment account statements, insurance policies, and credit card statements. These outline what assets the estate contains.
Petition the Probate Court to Open Probate
To obtain the legal authority to represent the estate, the administrator must secure “Letters of Administration” issued by the probate court in the county where the deceased resided.
The administrator petitions the court by filing paperwork and paying a fee. The court will appoint the administrator named in the will or an administrator based on state law if there is no will. This gives the administrator the legal right to access accounts, manage assets, and make distributions.
Notify Beneficiaries and Heirs
One of the estate administrator’s key duties is to notify all living beneficiaries named in the will and heirs who stand to inherit assets. These may include the spouse, children, other relatives, and friends of the deceased.
The administrator must send a formal notice that probate is moving forward and include a copy of the will. Beneficiaries can then contest the will if they wish. The administrator must properly notify all parties according to state laws.
Take Inventory of Estate Assets
A crucial step is creating a complete inventory of probate assets and non-probate assets that make up the total estate. The administrator must identify and appraise or determine market values for:
- Real estate and vehicles
- Bank accounts like checking and savings accounts
- Investment and retirement accounts like 401(k)s and IRAs
- Life insurance proceeds
- Household items like jewelry, art, furniture
- Debts or loans owed to the deceased
The inventory helps verify assets listed in estate planning documents. The values establish the worth of the estate for tax and distribution purposes.
Pay Debts, Expenses, and Taxes
Before distributing assets to heirs, the administrator must first pay off valid debts and expenses the estate owes. This may involve:
- Paying funeral and burial costs
- Paying attorney fees related to administering the estate
- Paying appraisal costs for assets
- Paying off the deceased person’s loans, credit cards, utilities, and medical bills
- Paying property taxes on assets like real estate or vehicles
- Filing state and federal estate tax returns and paying estate taxes
- Paying income taxes on income earned by the estate
The administrator must publish a notice to creditors and pay valid claims made during the allowed period, often 3-6 months.
Distribute Remaining Assets
Once all debts and expenses are settled, the administrator can distribute what’s left to the estate beneficiaries or heirs according to the will’s instructions or intestacy laws.
For probate assets like bank accounts and real estate, the administrator must transfer ownership. They will need to work with financial institutions, government agencies, and sometimes the court.
The administrator should require signed receipts from heirs acknowledging receiving distributions to protect themselves from any claims. All beneficiaries must receive what they are entitled to under state law if there is no will.
Close the Estate
Finally, the administrator petitions the court to close probate once all assets are distributed. The court will issue a formal order ending the administrator’s legal duties.
They must keep detailed records in case any questions arise later on. All beneficiaries should be informed probate is closed.
When is Estate Administration Necessary in Minnesota?
Not every estate has to go through formal court-supervised administration in Minnesota. However, it is required under the following circumstances:
- The deceased person owned real estate, financial accounts, or other assets subject to probate.
- There are disputes among beneficiaries over the will or estate distribution.
- The heirs want a court-appointed representative to administer the estate.
- The estate includes minor children who need guardian protection.
- There are creditor claims that must be resolved or paid.
You can avoid probate through proper estate planning, such as titling assets jointly or naming beneficiaries on financial accounts. But, if the deceased had solely owned major assets or debts, the full probate process will likely be required.
Who Can Serve as Estate Administrator in Minnesota?
Under Minnesota law, the executor named in the will has first priority to administer the estate. If there’s no will, Minnesota’s intestacy laws determine who can serve as administrator in this typical order:
- Surviving spouse
- Adult children
- Parents or siblings
- Other next of kin
Estate administrators must be at least 18 years old and have no felony convictions. The court also considers the proposed administrator’s:
- Honesty and integrity
- Ability to fulfill duties
- Willingness and availability to serve
Administrators who mismanage estate assets or fail to follow court procedures can be removed from their duties. The probate judge has the discretion to appoint a special administrator to preserve the estate until conflicts are resolved.
How Long Does Estate Administration Take in Minnesota?
The length of estate administration in Minnesota can vary depending on the estate’s complexity. Some key aspects that can affect the timeline include:
- Size of the estate – Larger estates with more assets, debts, and beneficiaries generally take longer.
- Will contests or disputes – Challenges to the will’s validity can prolong the process.
- Asset types – Some assets, like real estate or business interests, take longer to appraise and distribute.
- Claims or litigation – Addressing creditor claims and lawsuits against the estate adds time.
- Tax compliance – Estates with tax filing requirements often take more time.
On average, full estate administration takes roughly 12-18 months in Minnesota. Smaller, more straightforward estates can sometimes be finalized within 6-12 months.
An efficient executor can help expedite the process by promptly addressing duties, communicating with beneficiaries, and working closely with probate attorneys and accountants. Difficult estates with heirs contesting the will or assets can take several years.
How Much Does Estate Administration Cost in Minnesota?
Estate administration costs will depend on each estate’s unique circumstances. Some common expenses may include:
- Court filing fees – Around $340 to initiate probate in Minnesota.
- Probate attorney fees – An attorney can charge $200-$400 per hour, with total costs ranging from 1-4% of the total estate value.
- Executor fees – By law, executors can receive “reasonable compensation” for their services, typically 2-5% of the estate.
- Appraisal costs – If assets like real estate or a business must be professionally valued.
- Accounting fees – For preparing tax filings and maintaining finances.
- Bond premiums – If the court requires a surety bond to protect the estate.
- Property maintenance – Costs to upkeep and prepare real estate or vehicles for sale.
- Publication fees – For placing required legal notices in newspapers.
Estates under $100,000 can generally expect total administration costs under $10,000. Larger or more complex estates with tax liabilities may incur fees closer to $30,000 on average.
What Happens When There’s No Will?
When a person dies without a will (dying intestate), the estate is distributed according to the intestacy laws of the state where the decedent resided. These laws vary from state to state, but generally, the decedent’s surviving spouse and children are the first in line to inherit.
The estate may go to the decedent’s parents, siblings, or other relatives if there is no surviving spouse or children. If no relatives can be found, the estate typically escheats (reverts back) to the state.
In the absence of a will, the probate court will designate an administrator to oversee the management of the estate. This person has the same duties and responsibilities as an executor and must administer the estate according to state law.
Finding Help Administering an Estate
Depending on your state’s law and the complexity of the estate, you may be able to use simplified probate procedures to settle small estates. But for most administrators, getting legal help from an estate planning attorney, like those at Safe Harbor Estate Law, is recommended.
An attorney can guide you through each step while ensuring you fulfill your fiduciary duties properly. This is key to avoiding personal liability and minimizing family disputes. Estate attorneys and tax accountants can also help with complex asset appraisals and tax filings.
While administering an estate takes time and effort, having a clear understanding of the process can ease the burden. Following the steps covered in this guide will help ensure the estate is managed appropriately. Most importantly, use professionals like attorneys when needed – that’s what they are there for.
For help with administering an estate in Minnesota, reach out to Safe Harbor Estate Law online at https://safeharborestatelaw.com/.
Frequently Asked Questions:
Q: Are life insurance policies and beneficiary designations included in the estate administration process?
A: No, life insurance policies and beneficiary designations are typically not included in the estate administration process. These assets go directly to the named beneficiaries and are not subject to probate.
Q: Can I hire an estate administration attorney to assist with the process?
A: Yes, hiring an estate administration attorney is highly recommended, especially if the estate is complex or if there are disputes among beneficiaries. An attorney can help you navigate the legal requirements and ensure that the estate administration process is carried out correctly.
Q: What is the probate process, and does every estate have to go through it?
A: Probate is the legal process of proving the validity of a will and distributing the assets of a deceased person. Not every estate has to go through probate; it depends on the value of the estate and whether the assets are held jointly or have beneficiary designations.
