by Boyd Johnson on June 18, 2009
There has been some confusion in the Minnesota probate sphere concerning the effective date for the new asset limit for the Affidavit of Collection process.
For a recap of the issues, see here and here.
Multiple sources have confirmed that the effective date is 12:01 a.m. on August 1st and that the new asset limit is not currently in effect. Since the bill that was passed listed no effective date, the default date for non-appropriation bills is August 1st.
Practice Tip: If you have an estate that has more than $20,000 but less than $50,000 of probate assets, consider waiting until August 1st to take advantage of the new statute. Also recall that the successor need not present the affidavit in duplicate (a requirement under the old/current statute).
Special thanks to Tom Holker of Holker Law Offices for his work on verifying the effective date with the House Clerk.
Categorized in In the News, Practice Tips and tagged as affidavit, personal property, probate, probate code, small estate
by Boyd Johnson on May 26, 2009
“Small” is now bigger thanks to Governor Pawlenty’s approval of H.F. 265. The new law makes changes to Minnesota’s probate code.
Among other things, the bill revised Minn. Stat. 524.3-1201, the procedure for collecting personal property of a decedent by affidavit. Changes to this statute include:
- The asset limit increases from $20,000 to $50,000.
- The successor no longer has to present the affidavit in duplicate (once upon a time there were no photocopiers).
It appears that the law will be effective August 1, 2009. The statute itself does not limit the application of this procedure to those dying after August 1st, so presumably it will be “retroactive” in the sense that it could transfer property to the successor even if the decedent died prior to the effective date.
The obvious advantage of the increase to the asset limit is that more “small estates” will avoid probate.
However, with the increase in the asset limit, more problems will occur. For example:
- Creditors will have a more difficult time asserting claims against the estate and collecting on their bills since the procedural protections present with probates (e.g. filing claims statements, demanding notice, requesting bond, etc.) do not exist with the affidavit procedure.
- Successors will distribute the property improperly (both intentionally or unintentionally), creating inequalities in the distribution. Among dishonest and feuding family members, this will result in a race to get an affidavit to claim the property and gain control over the assets.
- Successors will distribute the property prior to paying lawful claims against the estate and will face liability from creditors or will ignore superior claims, such as exempt property under 524.2-403.
- Attorneys will need to increase the amount of “educating” they do for potential clients who think they “just need a form” to get the assets. “The form” cannot transfer real property.
Finally, expect the unauthorized practice of law to increase. I’ve heard of certain enterprising and devious financial planners preparing these affidavits for family members of deceased clients. They, of course, have self-interested benefits in doing so. By helping them obtain the assets “without the high cost of getting an attorney involved,” they can also “help them invest the assets.”
As always, successors will do well to obtain competent legal counsel prior to taking action. Though the procedure seems simple at first glance, there are many pitfalls in using the procedure.
Categorized in In the News, Practice Tips and tagged as affidavit, personal property, probate, small estate