A Minnesota Probate Lawyer Explains Probate vs. Non Probate Assets
Sally calls my office to explain that her husband, Joe, recently died and the bank is telling her that she needs to probate his estate before she can get the money out of his account. She is confused as she thought they owned everything jointly but the bank tells her that she can’t get certain assets without probate. She doesn’t understand the hold up.
What is probate?
I’ve written several posts on probate but a very simple explanation is the Minnesota Probate is the legal process of transferring assets that were owned in the decedent’s (fancy legal term for the person who died) name alone on his or her date of death and of satisfying creditors (paying his/her bills) of the decedent.
The probate process is governed by Minnesota Probate laws (statutes) passed by the state legislature.
What are probate and non-probate Assets?
Probate assets are assets a person owns in his/her name alone on death that do not transfer by beneficiary designation or other legal operation. If the bank account Sally referenced in her call was only in Joe’s name, and he did not have a “payable on death” beneficiary listed, it’s a probate asset. Likewise, if the home was just in his name, that is now a probate asset. Below are examples of non-probate assets.
Examples:
Non-probate asset
· Any asset with a beneficiary designation naming someone other than the estate
· Joint tenancy property
· Bank account with a “transfer on death” or “pay on death” designation
· Assets held by a trust
Probate Asset
· Any asset owned individually with no beneficiary or death designation
· Real estate owned alone or as a tenant in common
· Business interest owned in individual name
· Non-qualified investment account
So, who gets Joe’s Stuff?
The distribution of Joe’s assets (stuff) will be determined by the court. The court will follow Joe’s instructions in his will if one exists. If Joe didn’t have a valid Minnesota estate plan, the court will follow the Minnesota probate law governing intestacy (fancy legal word for “died without a will”).
Minnesota Probate Attorney
Contact Unique Estate Law at 952-955-7623 if you need to discuss a probate issue.