PROBATE CODE UPDATES

Starting August 1, 2016, the amounts available under the Minnesota Probate Code (Minn. Stat. Ch. 524) for a number of issues will be adjusted for the first time in more than 25 years. These issues include the family allowance, collection of personal property by affidavit, and spousal intestate share with children from a previous relationship. The updates will also affect amounts under exempt property under Minn. Stat. § 524.2-403(a) and (c), and the threshold for summary administration, in addition to a number of changes that do not relate to dollar amounts.

THE FAMILY ALLOWANCE

The family allowance is designed to provide funds to a spouse and minor children during the administration of an estate. The allowance can constitute monthly payments for up to one year if the estate does not have enough funds to pay all allowed claims, or eighteen months if the estate is fully solvent. These funds come out of the estate before any distributions are made, and the personal representative currently has the ability to determine a monthly allowance of up to $1,500. On August 1^st, that amount will increase to up to $2,300 per month.

COLLECTION OF PERSONAL PROPERTY BY AFFIDAVIT

Collection of personal property by affidavit (see Jamie Held’s article from April 2011 here) refers to the maximum amount of probate assets that can be transferred from the decedent’s name without use of the probate process. If the decedent had funds in a trust in order to avoid probate, this is the maximum amount that could be held outside that trust in the decedent’s own name. That amount is currently $50,000, but will increase to $75,000 on August 1^st. The process for this collection is outlined in Minn. Stat. § 524.3-1201.

SPOUSAL INTESTATE SHARE

When a person dies without a valid will or trust, the state has enacted statutes that govern that “intestate” succession. One of the standard assumptions that go into that calculation is that the decedent spouse would elect to support the surviving spouse and any surviving children. The statutory default if the surviving spouse is the parent of all surviving children is that the surviving spouse is entitled to the entire intestate estate, because that spouse is likely to support those children.

The calculation gets a little more complex when the surviving spouse is not a parent of one or more of the surviving children, because, while there might be a personal or ethical compulsion to pass on funds to or support the surviving children, there is no biological connection. In order to better ensure support of those children, the statutory default in that case grants the surviving spouse the first $150,000 of the estate, plus one-half of any remaining funds, with the remainder going to the decedent’s children from a previous relationship. On August 1^st the amount available to the surviving spouse will be raised to the first $225,000, plus one-half of the remaining funds.