Blog Post Three

Probate. What is it, and what will it cost?

Strictly speaking, probate is simply the “judicial procedure by which a testamentary document is established to be a valid will.” PROBATE, Black's Law Dictionary (11th ed. 2019). In other words, probate is the process in which the Court reviews a will and confirms that it is valid and enforceable.

When most people talk about probate, what they really mean is the process by which an estate is administered, including the payment of claims and expenses and the distribution of assets. While each state has its own probate laws, both North Dakota and Minnesota have adopted, with modifications, the Uniform Probate Code which is a set of laws meant to create a more consistent probate process.

Probate can be formal or informal and supervised or unsupervised. The differences between these will be discussed in a later post. For now, it is enough to know that most are informal and unsupervised. Generally, a testate estate (one in which there is a will) is commenced by filing an Application for Informal Probate of Will and Appointment of a Personal Representative with the Court. An original will is necessary. If the original will has been lost or destroyed, the estate will be deemed intestate (without a will) unless the Court is convinced that the loss or destruction was unintentional. Even then, a formal probate will be required. The petitioner typically nominates a personal representative (previously known as an executor or executrix), who is usually identified in the will.

Assuming there are no issues or objections, the Court will then appoint the nominated personal representative and issue Letters Testamentary. Letters Testamentary act as a badge of office and may need to be provided to banks to open an estate account or to access money from the decedent’s accounts. In North Dakota, this part of the process can occur very quickly, often within a week or two of the Application being filed.

When the personal representative is appointed, they will need to provide notice of the appointment to certain people including heirs and devisees, creditors, and the relevant state authorities.

In Minnesota, the process is slightly different, and slower, in that you must mail and publish the required notices before the Court will issue Letters Testamentary.

Once the Letters Testamentary are issued, the personal representative’s work really begins. They will need to locate, identify, and collect assets. They may be required to appraise property, file tax returns for the decedent, clean and empty the decedent’s home, contact creditors, and pay bills. As the administration starts to wrap up, the personal representative should finish paying creditors, make sure the assets end up with the proper recipient, and then prepare a final account. Personal representatives are entitled to reasonable payment for the work they perform.

So what does probate cost? That is the million dollar question. Gone are the days where an attorney is paid a percentage of the estate, though this may still be the case in other states. Today, it is most common to pay an hourly rate or, occasionally, a flat fee. This means that the larger, more complex, or unorganized an estate is, the more it is likely to cost.

What can you do to reduce expenses? Have a well prepared estate plan and get your ducks in a row. Ideally, all of your important papers should be organized and in a place where your personal representative can find them. If your personal representative knows in advance what is expected of them, it may help things run more efficiently.