Minnesota Probate Law | Homestead, Real Estate, and Property

by Flanders Law Firm LLC on December 2, 2014

Minnesota probate homestead

Many people have multiple homes, townhouses, condos, or other land which are referred to under Minnesota law as “real property”.

When someone passes-away and the title to the real property or real estate is in their name, a court must appoint a personal representative or executor to administer their loved-one’s estate.  Often, the personal representative is the surviving spouse or a daughter or son of the deceased person.

Real estate and a Person’s Will

As most estate planning lawyers in Minnesota will tell you that it is important to have a Will or other document like a Trust. Most people know that.

If a person dies and they have a Will, it is often the case that each of their children will receive an interest in their real estate (home, invest property, etc.). This leaves a problem for the court  because the title to the property is still in the deceased person’s name but it belongs, essentially, to the children. The probate court judge will need to decide how to administer the property and give it to the children pursuant to the Will.

What about creditors (debts)?

In almost every estate, there will be debts owed. Probate attorneys in Minnesota refer to this as creditor claims. As we have talked about in prior posts, there are certain exceptions to creditor claims and every probate estate has certain exemptions. What are those exemptions?:  the deceased person’s homestead, one vehicle, and, possibly, a family allowance. These assets are exempt from most creditor claims – but not all. Further questions on what may or may not be exempt from creditor claims including real estate, contact the Minnesota probate attorney.

What to do with multiple parcels of real estate?

When a person owes multiple parcels of real estate, the probate court and attorney will need to discuss selling or transferring of those parcels to the probate estate. How was this done?

As we discussed above, a person’s probate homestead (where they lived full-time) is exempt from most creditor claims.   But what about other parcels of real property?

If the deceased person owns several houses, perhaps a lake cabin up north, and an investment property, those properties may need to be sold to pay outstanding debts.  These debts can include expenses of last illness, credit card claims, mortgages, or any other debt owed by the deceased person to any person or business.

A second parcel of real property, as opposed to the homestead, is not typically exempt from most creditor claims. If there is a not enough ready cash in the person’s estate to pay creditor claims, the cabin or investment property may need to be sold. This is not say that all of the money from the sale of the real estate will go to a creditor. Instead, the creditor claim maybe paid off in full or partially, but usually in the sale of real estate, there is a lot more money to go around to the children of the deceased person.

In sum, it is important to understand how real estate is dealt with in the court system and to understand that the homestead is exempt from most creditor claims. Exempt homesteads will transfer automatically through probate administration pursuant to the deceased person’s will.  Again, a probate attorney should be contacted with any questions about this.

Minnesota Probate Attorneys and Lawyers

Flanders Law Firm LLC, a Dakota County Minnesota probate attorney, are ready to answer your estate administration or probate questions. For more information and a free consultation, contact the firm at 612-424-0398.

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{ 2 comments… read them below or add one }

Jeff Snyder August 29, 2017 at 12:05 pm

My brother and I are Remaindermen in a life estate created by our folks in 1990. I am single, he is married. When the folks created the life estate they also made a ‘Special Needs Trust’ for our mentally disabled sister. Dad passed away in 2012. The property has one Tax ID but comprises two separate surveyed parcels. What is the process to separate them and create a new parcel tax id for the second parcel? The second parcel is vacant land. The first parcel has moms house and all outbuildings on it and would remain the actual original address. How would separation of the two affect long term medical assistance for my mom when the time comes? Thank you. Jeff Snyder

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Flanders Law Firm LLC August 31, 2017 at 4:17 pm

Hi Jeff. I wouldn’t be able to comment on the documents and estate plan that your parents have without looking at them. Sorry. If you want to make an appointment, please call the firm at 612-424-0398. Thanks.

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