Probate Pays Off Debts And Distributes Assets
Probate is the process of paying the debts and distributing the assets of someone who has passed away without a will. It involves an executor or personal representative to act on behalf of the estate to complete the process. Court proceedings may or may not be necessary, depending on the assets.
Debts and Distributions
When a Loved One dies in Minnesota, his or her debts must be paid to their creditors and their assets distributed to their heirs or beneficiaries. When I say "assets," I mean the deceased person's real estate, bank accounts, stock or bonds, 401K's, automobile, furniture, jewelry and other personal property.
If there is a will, that is the roadmap of the deceased person's distribution that must be followed.
If there is no will, then we must rely on the program of distribution that the legislature has provided in the probate law. When there is no will, this is called "intestacy" and the assets are split according to what the legislature decides what it thinks most people would have wanted.
The Role Of The Executor
The key person in administering the estate is called the "personal representative" or "executor." If there is a will, the person usually nominates who he or she wants to be executor. The court usually will go along with the choice of the deceased person to become executor.
The executor has the job to collect all of the decedent's assets and bills and see that the beneficiaries recover what the deceased person wanted each beneficiary to get. The executor is also responsible to see that the estate accounts are properly set up, pay the decedent's bills and see that the decedent's tax returns are filed.
The Executor Must Be Held Accountable
The executor is accountable to the beneficiaries to supervise the administration of the estate. He or she must make sure the estate is administered in a fair and legal manner.
The executor or personal representative (again both words mean the same thing) who is appointed becomes what we call a "fiduciary." This means he or she has a high duty to handle the probate assets in a careful and prudent manner. He must safeguard the assets for the benefit of the beneficiaries and he cannot use the estate assets as though they were the executor's personal property.
The executor is entitled to reasonable compensation and reimbursement for the expenses he or she had to pay to carry out his or her job.
The Job Of Executor Is Important
The job of an executor or personal representative is an important one for the family. Sometimes it can seem like a thankless task. However, it is a job that can help preserve peace in the family as well as transmit the wealth and property to the heirs or beneficiaries.
The contents of this video are for information only and is not to be interpreted as legal advice. For personal legal advice you should consult with an attorney who is experienced in probate law or estate planning.