In Minnesota an executor is a fiduciary who has the job of settling the estate of a decedent. MN Stat § 524.1-201(18). “Settling” an estate means tending to matters that the decedent left behind such as handling their debt and disposing of their property. While they are sometimes nominated in the decedent’s will, in order to legally have power, a personal representative must be appointed by the probate court judge. In Minnesota, probate matters are handled by the District Court.
Other terms for “personal representative” include “executor” and “administrator.” MN Stat § 524.1-201(40). Historically, the term “executor” was used in the context of a testate estate where the decedent nominated their executor in their will, while “estate administrator” or “administrator” was often used in the context of an intestate estate where the decedent did not leave a valid will. Nowadays, the term “personal representative” is commonly used both in the context of testate and intestate estates.
Duties and Responsibilities
The duties and responsibilities of the personal representative are defined by Minnesota state law. MN Stat § 524.3-703. Generally, they are required to perform the steps needed to address the debt the decedent left behind and distribute their property to those legally entitled to it. The general steps include inventorying the decedent’s estate, paying the decedent’s debt and expenses of administration, and distributing estate assets to the decedent’s beneficiaries and heirs.
Inventorying the estate. During the estate administration process, the personal representative is responsible for managing the decedent’s property. One of the first things that the personal representative must do is figure out which property is part of the decedent’s probate estate, determine its value, and create an inventory of it. MN Stat § 524.3-706. Note that not all of the decedent’s property is probate property. There is some property that is not subject to the court-supervised administration process. For example, retirement assets such as 401(k) plans and IRAs are not probate property. Instead of being subject to the administration process, assets in 401(k) plans and IRAs pass to designated beneficiaries outside of the probate process.
Paying debt. The personal representative is also responsible for dealing with the decedent’s debt. Most people leave some debt behind, even if it is only medical bills related to their last illness or injury. Whether the debt is a medical bill, credit card debt, student loans, or other debt, it generally is not forgiven at death. Debt must be paid out of estate assets prior to distribution of assets. The personal representative must take steps to determine who is owed money and how much. Minnesota law requires that the personal representative notify creditors that the decedent’s estate is in the administration process. MN Stat § 524.3-801. To get paid, creditors must file their claims during the claims period. The personal representative will only pay substantiated claims, in order of priority, and only to the extent that the estate has enough money to pay them.
In addition to paying debt, the personal representative must also pay expenses related to the administration process. For example, court fees and fees charged by professionals are also paid from estate assets.
Distributing assets. Before the personal representative distributes assets, the estate must be ready for asset distribution. This means that debt and expenses must be paid or otherwise addressed. The personal representative must ask the court’s permission to distribute after presenting a plan for distribution.
If the decedent left a will, asset distribution is based on the will. If the decedent did not leave a will, then assets will go to the decedent’s next of kin based on Minnesota’s intestate succession law. Typically, this means that the assets go to the decedent’s surviving spouse and children. However, it depends on who is the decedent’s closest surviving relative.
Compensation of a Minnesota Personal Representative
The job of the personal representative is not easy. It is time consuming and detail oriented. The good news is that personal representatives do not work for free. Under Minnesota law, they are entitled to be compensated. The amount of compensation is based on the terms of the will. If the will is silent or there is not will, then the personal representative would be entitled to reasonable compensation ad determined by the court. MN Stat § 524.3-719.