Settling Small Estates (MN)
In Minnesota, small estates can completely bypass probate via small estate affidavit, or simplify it via summary administration. Regardless of estate size, probate is not required if an estate contains only assets exempt from probate.
Small Estate Affidavit
If a Minnesota gross estate is worth <$75,000, you can use the small estate process to settle an estate with no court involvement.
Requirements
To use the small estate process, the following conditions must be true:
- The estate has a gross value <$75K
- At least 30 days have passed since the death
- No petition has already been made to the court to officially appoint a personal representative
In determining the gross value of the estate, you should value assets as of the date of death, and ignore any unsecured debts. Do not include any assets that would not normally go through probate, such as community property with right of survivorship, assets with named beneficiaries (e.g., 401Ks, life insurance policies), and other standard probate exclusions.
Process
To use the small estate process:
- Prepare a Small Estate Affidavit (Form PRO202), have it notarized, and attach a copy of the death certificate
- Obtain possession of estate assets by presenting the affidavit to current custodians (this affidavit cannot be used to collect real estate)
- Settle the estate in the normal way (pay debts, distribute remaining assets)
Settlement Priority
When settling the estate, you must allocate estate assets in the following priority order:
- Family entitlements (other than a spousal elective share)
- Costs and expenses of estate administration
- Reasonable funeral expenses
- Federal taxes
- Reasonable and necessary medical, hospital, and nursing home expenses for the last year of life
- State taxes
- All other debts
- Distributions to heirs
See MN Stat § 524.3-805.
See also Making Distributions and Resolving Debts.
See MN Stat § 524.3-1201.
Summary Administration
Summary Administration (also known as simplified probate) can be used for somewhat larger estates, or if you simply want court involvement so that enforcement and protection are a bit more formalized.
Requirements
You can use summary administration (also known as simplified probate) if it appears that the value of the entire estate does not exceed the sum of items 1-6 in the settlement priority list above.
You can also use summary administration if the estate value, not including any homestead or exempt property (see Family entitlements) does not exceed $150K.
In determining the value of the estate, you should value assets as of the date of death. Ignore any unsecured debts (such as credit cards), but do account for secured debts such as mortgages (i.e., if a house is worth $150K and has a $130K mortgage, the house would contribute $20K to the estate value). Do not include any assets that would not normally go through probate, such as community property with right of survivorship, assets with named beneficiaries (e.g., 401Ks, life insurance policies), and other standard probate exclusions.
Process
To settle an estate via summary administration:
-
Submit an Petition for Summary Assignment to the court
(This form provided by MN is a bit dated, and you may need to modify it to match the above dollar limit) - The court may require you to send notices and schedule a hearing
- Upon approval, the court will assign ownership of estate assets in the settlement priority order
- Use the court order to collect and distribute the assets
See CRS § 524.3-1203.
Estate Settlement Considerations
Before paying any debts or making any distributions, be sure to account for any Family Entitlements in MN, which typically have priority over everything except expenses of the last illness, funeral charges, and any estate administrations expenses.
Even if the estate does not go through probate, you may still be entitled to MN Executor Compensation, and this compensation also has priority over most estate debts.
Estate debts have priority over most distributions in turn, so before distributing assets you should resolve any estate debts. If the estate makes any distributions beyond amounts set aside for family entitlements, unpaid creditors have the right to sue the recipients for repayment using those excess distributions. Consequently, even if the settlement process does not require you to publish a Notice to Creditors, you may want to follow MN probate rules for finding estate debts, since doing so may limit the time creditors have to pursue repayment.
If estate solvency is uncertain, an executor should consider going through official probate for the increased creditor protection it offers. Alternately, such uncertainty can sometimes persuade creditors to forgive a portion of debts, since they will want to avoid legal expenses as well, and may prefer to get something rather than nothing.
See also Making Distributions.
Court
In Minnesota, the local District Court handles wills and estate matters.
Additional Information
If your estate doesn't qualify for a small estate approach, or you're simply interested in exploring standard probate, take a look at Probate in MN.
And since probate is just the court-supervised subset of winding up a person's affairs after death, you'll probably want to check out our Complete Guide to Estate Settlement in MN.
Finally, in case you're interested, details about handling small estates in other states can be found here: