A Minnesota Probate Lawyer Cautions Against Certain Actions When You Act as a Personal Representative (Executor)
1. NEVER distribute estate assets until there has been a full assessment of potential claims against the estate.
Minnesota statutes require that probates remain open for at least four months. This gives creditors adequate time to notify the personal representative of potential claims. Distributing assets before the expiration of this four-month creditors’ claims period opens the personal representative to liability if there is not enough money to pay the claims.
2. NEVER use the estate’s funds for personal expenses.
The personal representative has a duty to act in the best interests of the estate. “Borrowing” the estate’s funds or misappropriating the funds is the same as stealing someone else’s money. It’s better to start clean and immediately open an estate bank account and run all the estate money through it.
3. NEVER neglect tax issues.
Ordinarily it is the responsibility of the personal representative to file the estate’s tax returns. Failure to do so could cause penalties and expose the personal representative to liability.
4. NEVER ignore a court order.
As a condition to being appointed, the personal representative agrees to submit to the jurisdiction of the court. This means obeying court orders and local rules and following Minnesota probate statutes. Disobeying the court could result in personal liability against the personal representative, or worse, the court ordering the personal representative to appear before it to explain why you disobeyed the court. It is within the court’s power order jail time or a fine for a personal representative who disobeys a court order.
5. NEVER distribute the last of the funds in the estate until a full final accounting has been done and all debts paid. I handled a probate where the only asset was the decedent’s home. The home was sold and a check issued to each beneficiary for the full amount of the sale price. At the end of the probate, the personal representative did not have enough cash on had to reimburse himself the full amount of legal fees paid to handle the probate.
It’s much more difficult (almost impossible) to get money back from someone once it’s been paid out. Far easier,
6. NEVER ignore a claim.
Minnesota probate law requires creditors to submit a claim against the estate in order to get paid. The creditors will notify the personal representative of potential claims. The personal representative should carefully review each claim. If he/she doesn’t think it’s legitimate (or owed) the PR MUST notify the creditor of the disallowance of the claim within 2 months of receipt of the claim.
I had a client who ignored a claim (despite my repeated warnings) and the two months passed without him filing a notice of disallowance. He then asked if he could dispute the claim. Unfortunately, it was too late to dispute the claim even though he had a good case for disallowance. He was then forced to work with the creditor to settle the claim.
I know it’s a difficult time working through a probate after the death of a loved one, but please don’t simply ignore issues. It’s my job to help you tackle these problems, so work with me.
7. NEVER proceed without counsel.
Minnesota’s probate laws are complex even for seasoned attorneys. Making mistakes can be costly to the estate and can even cause the personal representative to become personally liable for the mistakes. Even before a probate proceeding is commenced, there are many issues that need to be dealt with, including how to handle creditor claims, deciding on the right place to op