Those who are managing the estate of a loved one who has passed may want to avoid probate while still withdrawing funds in a small bank account. I often get asked about this. The question goes something like this:
I am managing the estate of my mother who died. She had money in her bank account. The account had no “beneficiaries” named. How do I get these funds without doing probate?
The answer is simple: use an Affidavit of Collection.
Affidavit of Collection
Minnesota has a process for avoiding probate in situations like these. It is governed under Minnesota Statutes sections 524.3-1201 through 524.3-1204 (copied below).
Here is a simple Affidavit of Collection Template.
In short, an Affidavit of Collection is a procedure that transfers assets of estates that would otherwise be probated and that have a net value of under $75,000. With the affidavit, there is no court appearance, no personal representative appointed, and no mailed notification to interested parties. Presenting the affidavit to the possessor of the decedent’s property is sufficient to make the transfer. The affidavit can transfer only personal property. Personal property includes bank accounts, stocks, furniture, motor vehicles, and the like; it does not include real estate.
A. The right to collect by affidavit
To recover MA claims under Minnesota Statutes, section 256B.15, you may use an affidavit of collection to collect the deceased MA recipient’s personal property once 30 days or more have passed since the decedent’s death. See Minnesota Statutes, section 524.3-1201.
The affidavit can collect the decedent’s personal property in safe deposit boxes, interests in multiple-party accounts, and debts owed to the decedent. See Minnesota Statutes, sections 524.3-1201, 55.10, and 524.6-207.
There are important limitations to affidavits of collection. An affidavit of collection may be used only when the decedent’s estate consists of personal property with a net value of $75,000 or less. In addition, you cannot exercise the right to collect by affidavit when a request for appointment of a personal representative is pending.
B. How to recover by affidavit
To collect by affidavit, mail or deliver to the party in possession of the decedent’s personal property a certified copy of the death certificate and a copy of an affidavit stating:
- that the net value of the entire probate estate, including the contents of any safe deposit box, less liens and encumbrances, does not exceed $75,000;
- that 30 days have passed since the decedent’s death (if the property to be collected is in a safe deposit box, state that 30 days have passed since the filing of an inventory of the contents of the box);
- that no application or petition for the appointment of a personal representative is pending or has been granted in any jurisdiction;
- the amount of the MA claim and a good faith estimate of the extent to which the decedent was the source of funds or beneficial owner of the account (if you will present the affidavit to a financial institution with a multiple-party account in which the decedent had an interest at the time of death); and
- that the claiming successor is entitled to payment or delivery of the property.
You do not have to describe or identify the property you seek to collect on. However, when collecting from a safe deposit box, you must have a bank employee witness and verify the process.
C. Collecting on a motor vehicle
Collect on an estate’s motor vehicle by presenting the applicable county’s motor vehicle registrar with the decedent’s death certificate and the affidavit.
Presenting the affidavit to the registrar effectively transfers title to the decedent’s motor vehicles to you. The registrar must then issue a certificate of title for the decedent’s motor vehicle in your local agency’s name. Ensure this transfer by applying for the title.
To clarify your authority in this collection, it may be helpful to present the registrar with a copy of the statute—Minnesota Statutes, section 524.3-1201, paragraph (d)—and a statement that your local agency is tax exempt in this situation.
D. Duties of the party receiving an affidavit of collection
A party receiving an affidavit of collection must:
- pay the debt owed to the decedent to you and turn over to you the decedent’s personal property in the party’s possession or control and
- discharge and release the personal property to the same extent as the party would have had it dealt with the decedent’s personal representative.
A court may require a party receiving an affidavit of collection to pay, deliver, transfer or otherwise turn over the personal property if the party refuses to do so voluntarily. See Minnesota Statutes, section 524.3-1202.
Finally, ensure that an employee of an institution holding a safe deposit box you are collecting from has created an inventory of the box’s contents. See Minnesota Statutes, section 524.3-1201, paragraph (a), clause (2); see also Minnesota Statutes, section 55.10, subdivision 4, paragraph (h).
E. Your duties to parties with a superior claim
You must give any proceeds you receive via an affidavit of collection to any party with a superior right to those proceeds under Minnesota Statutes, sections 524.2-403 and 524.3-805. You must also answer and account to the decedent’s personal representative, or any person with a superior right to the property. As soon as you learn there is a personal representative, answer and account by:
- notifying the personal representative that you have received property and
- providing an accounting of property received.
F. Rights to a decedent’s interest in multiple-party accounts
You may serve an affidavit of collection on the financial institution holding a multiple-party account in which the decedent had an interest. The affidavit must state the amount of the MA claim and provide a good faith estimate of the amount of the decedent’s interest in the multiple-party account.
When it receives the affidavit, the financial institution must give you the lesser of (1) the amount of the claim stated in the affidavit or (2) the portion of the account that the affidavit identifies the decedent was the source of funds for or beneficial owner of.
The financial institution where the account is located can pay the account according to its terms anytime before being presented with the affidavit of collection. If the financial institution has already paid the multiple-party account to the survivors or payable-on-death (POD) payees before receiving the affidavit of collection, you may collect by presenting those parties with the affidavit. See Minnesota Statutes, sections 524.3-1201 and 524.6-207.
Minnesota’s Affidavit of Collection Statutes (2017)
For your convenience, the 2017 version of the Minnesota Statutes sections related to using an Affidavit of Collection are copied below.
Minn. Stat. § 524.3-1201
COLLECTION OF PERSONAL PROPERTY BY AFFIDAVIT.
(a) Thirty days after the death of a decedent, (i) any person indebted to the decedent, (ii) any person having possession of tangible personal property or an instrument evidencing a debt, obligation, stock, or chose in action belonging to the decedent, or (iii) any safe deposit company, as defined in section 55.01, controlling the right of access to decedent’s safe deposit box shall make payment of the indebtedness or deliver the tangible personal property or an instrument evidencing a debt, obligation, stock, or chose in action or deliver the entire contents of the safe deposit box to a person claiming to be the successor of the decedent, or a state or county agency with a claim authorized by section 256B.15, upon being presented a certified death record of the decedent and an affidavit made by or on behalf of the successor stating that:
(1) the value of the entire probate estate, determined as of the date of death, wherever located, including specifically any contents of a safe deposit box, less liens and encumbrances, does not exceed $75,000;
(2) 30 days have elapsed since the death of the decedent or, in the event the property to be delivered is the contents of a safe deposit box, 30 days have elapsed since the filing of an inventory of the contents of the box pursuant to section 55.10, paragraph (h);
(3) no application or petition for the appointment of a personal representative is pending or has been granted in any jurisdiction;
(4) if presented, by a state or county agency with a claim authorized by section 256B.15, to a financial institution with a multiple-party account in which the decedent had an interest at the time of death, the amount of the affiant’s claim and a good faith estimate of the extent to which the decedent was the source of funds or beneficial owner of the account; and
(5) the claiming successor is entitled to payment or delivery of the property.
(b) A transfer agent of any security shall change the registered ownership on the books of a corporation from the decedent to the successor or successors upon the presentation of an affidavit as provided in subsection (a).
(d) A motor vehicle registrar shall issue a new certificate of title in the name of the successor upon the presentation of an affidavit as provided in subsection (a).
(e) The person controlling access to decedent’s safe deposit box need not open the box or deliver the contents of the box if:
(1) the person has received notice of a written or oral objection from any person or has reason to believe that there would be an objection; or
(2) the lessee’s key or combination is not available.
Minn. Stat. § 524.3-1202
EFFECT OF AFFIDAVIT.
The person paying, delivering, transferring, or issuing personal property or the evidence thereof pursuant to an affidavit meeting the requirements of section 524.3-1201 is discharged and released to the same extent as if the person dealt with a personal representative of the decedent. The person is not required to see to the application of the personal property or evidence thereof or to inquire into the truth of any statement in the affidavit. In particular, the person delivering the contents of a safe deposit box is not required to inquire into the value of the contents of the box and is authorized to rely solely upon the representation in the affidavit concerning the value of the entire probate estate. If any person to whom an affidavit is delivered refuses to pay, deliver, transfer, or issue any personal property or evidence thereof, it may be recovered or its payment, delivery, transfer, or issuance compelled upon proof of their right in a proceeding brought for the purpose by or on behalf of the persons entitled thereto. Any person to whom payment, delivery, transfer or issuance is made is answerable and accountable therefor to any personal representative of the estate or to any other person having a superior right.
Minn. Stat. § 524.3-1203
Subdivision 1.Petition and payment.
Upon petition of an interested person, the court, with or without notice, may determine that the decedent had no estate, or that the property has been destroyed, abandoned, lost, or rendered valueless, and that no recovery has been had nor can be had for it, or if there is no property except property recovered for death by wrongful act, property that is exempt from all debts and charges in the probate court, or property that may be appropriated for the payment of the property selection as provided in section524.2-403, the allowances to the spouse and children mentioned in section 524.2-404, and the expenses and claims provided in section 524.3-805, paragraph (a), clauses (1) to (6), inclusive, the personal representative by order of the court may pay the estate in the order named. The court may then, with or without notice, summarily determine the heirs, legatees, and devisees in its final decree or order of distribution assigning to them their share or part of the property with which the personal representative is charged.
Subd. 2.Final decree or order.
If upon hearing of a petition for summary assignment or distribution, for special administration, or for any administration, or for the probate of a will, the court determines that there is no need for the appointment of a representative and that the administration should be closed summarily for the reason that all of the property in the estate is exempt from all debts and charges in the probate court, a final decree or order of distribution may be entered, with or without notice, assigning that property to the persons entitled to it under the terms of the will, or if there is no will, under the law of intestate succession in force at the time of the decedent’s death.
Subd. 3.Summary distribution.
Summary distribution may be made under this section in any proceeding of any real, personal, or other property in kind in reimbursement or payment of the property selection as provided in section 524.2-403, the allowances to the spouse and children mentioned in section 524.2-404, and the expenses and claims provided in section 524.3-805, paragraph (a), clauses (1) to (6), inclusive, in the order named, if the court is satisfied as to the propriety of the distribution and as to the valuation, based upon appraisal in the case of real estate other than homestead, of the property being assigned to exhaust the assets of the estate.
Subd. 4.Personal representative.
Summary proceedings may be had with or without the appointment of a personal representative. In all summary proceedings in which no personal representative is appointed, the court may require the petitioner to file a corporate surety bond in an amount fixed and approved by the court. The condition of the bond must be that the petitioner has made a full, true, and correct disclosure of all the facts related in the petition and will perform the terms of the decree or order of distribution issued pursuant to the petition. Any interested person suffering damages as a result of misrepresentation or negligence of the petitioner in stating facts in the petition pursuant to which an improper decree or order of distribution is issued, or the terms of the decree or order of distribution are not performed by the petitioner as required, has a cause of action against the petitioner and the surety to recover those damages in the court in which the proceeding took place. That court has jurisdiction of the cause of action.
Subd. 5.Exhaustion of estate.
In any summary, special, or other administration in which it appears that the estate will not be exhausted in payment of the priority items enumerated in subdivisions 1 to 4, the estate may nevertheless be summarily closed without further notice, and the property assigned to the proper persons, if the gross probate estate, exclusive of any exempt homestead as defined in section 524.2-402, and any exempt property as defined in section 524.2-403, does not exceed the value of $150,000. If the closing and distribution of assets are made pursuant to the terms of a will, no decree shall issue until a hearing has been held for formal probate of the will as provided in sections 524.3-401 to 524.3-413.
No summary closing of an estate shall be made to any distributee under this subdivision, unless a showing is made by the personal representative or the petitioner, that all property selected by and allowances to the spouse and children as provided in section 524.2-403 and the expenses and claims provided in section 524.3-805have been paid, and provided, further, that a bond shall be filed by the personal representative or the petitioner, conditioned upon the fact that all such obligations have been paid and that all the facts shown on the petition are true, with sufficient surety approved by the court in an amount as may be fixed by the court to cover potential improper distributions. If a personal representative is appointed, the representative’s bond shall be sufficient for such purpose unless an additional bond is ordered, and the sureties on the bond shall have the same obligations and liabilities as provided for sureties on a distribution bond.
In the event that an improper distribution or disbursement is made in a summary closing, in that not all of said obligations have been paid or that other facts as shown by the personal representative or the petitioner, are not true, resulting in damage to any party, the court may vacate its summary decree or closing order, and the petitioner or the personal representative, together with the surety, shall be liable for damages to any party determined to be injured thereby as herein provided. The personal representative, petitioner, or the surety, may seek reimbursement for damages so paid or incurred from any distributee or recipient of assets under summary decree or order, who shall be required to make a contribution to cover such damages upon a pro rata basis or as may be equitable to the extent of assets so received. The court is hereby granted complete and plenary jurisdiction of any and all such proceedings and may enter such orders and judgments as may be required to effectuate the purposes of this subdivision.
Any judgment rendered for damages or the recovery of assets in such proceedings shall be upon petition and only after hearing held thereon on 14 days’ notice of hearing and a copy of petition served personally upon the personal representative and the surety and upon any distributee or recipient of assets where applicable. Any action for the recovery of money or damages under this subdivision is subject to the time and other limitations imposed by section 524.1-304.
Minn. Stat. § 524.3-1204
SMALL ESTATES; CLOSING BY SWORN STATEMENT OF PERSONAL REPRESENTATIVE.
(a) Unless prohibited by order of the court and except for estates being administered by supervised personal representatives, a personal representative may close an estate administered under the summary procedures of section 524.3-1203 by filing with the court, at any time after disbursement and distribution of the estate, a statement stating that:
(1) to the best knowledge of the personal representative, the entire estate, less liens and encumbrances, did not exceed an exempt homestead as provided for in section 524.2-402, the allowances provided for in sections 524.2-403 and 524.2-404, costs and expenses of administration, reasonable funeral expenses, and reasonable, necessary medical and hospital expenses of the last illness of the decedent;
(2) the personal representative has fully administered the estate by disbursing and distributing it to the persons entitled thereto; and
(3) the personal representative has sent a copy of the closing statement to all distributees of the estate and to all creditors or other known claimants whose claims are neither paid nor barred and has furnished a full account in writing of the personal representative’s administration to the distributees whose interests are affected.
(b) If no actions or proceedings involving the personal representative are pending in the court one year after the closing statement is filed, the appointment of the personal representative terminates.
(c) A closing statement filed under this section has the same effect as one filed under section 524.3-1003.