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The Ins And Outs Of Probate Exemptions

Probate is the legal process that distributes a deceased person’s estate to heirs and designated beneficiaries. It also pays off any debts owed by the deceased. However, certain assets are exempt from probate in Minnesota, allowing for a more streamlined transfer to beneficiaries.

When planning your estate, understanding which assets are exempt from probate can save your loved ones time and stress. Bill Peterson of Peterson Law Office, LLC, has over 50 years of experience helping clients create a strategic estate plan or determine which assets can bypass the probate process.

Exempt Assets: The Basics

These assets are generally exempt from probate, passing directly to beneficiaries:

  • Property owned as joint tenants automatically transfers to the surviving owner(s).
  • Jointly held bank accounts typically pass to the surviving account holder.
  • Payable-on-death accounts transfer directly to the named beneficiary.
  • Life insurance proceeds go to the named beneficiary, separate from the estate.
  • Pension benefits with a designated beneficiary also avoid probate.

Knowing which assets are exempt is crucial for effective estate planning.

Spousal Rights To Exempt Property

In Minnesota, a surviving spouse has specific rights to exempt property. Examples include:

  • A life estate in the homestead allowing residence in the home for life
  • One automobile, regardless of value
  • Up to $15,000 worth of tangible personal property or cash
  • A family allowance: up to $2,300 per month for a maximum of 18 months
  • A portion of the “augmented estate” according to state law

These rights protect the surviving spouse, better ensuring they have the necessary means to continue living without undue financial hardship.

Nonexempt Assets And Their Role

Nonexempt assets differ from exempt assets in that they must go through the probate process and may be used to satisfy creditor claims against the estate. Examples include solely owned bank accounts without a payable-on-death designation, individual stocks and bonds, and real estate owned solely by the deceased.

Connect With Us For Probate Guidance

Navigating the complexities of probate exemptions doesn’t have to be guesswork. The Peterson Law Office, LLC, provides clear, understandable guidance to protect our client’s assets and meet their estate planning needs. Call us at 952-641-7312 or contact us today for personalized assistance with your estate planning and probate concerns.