When a spouse or parent passes away, the surviving spouse or children often worry about what will be left to them. This concern is not necessarily driven by greed but rather by the unknown of what will happen next. Are we going to be kicked out of the house? Will I be able to keep the lights and heat on? What can creditors come after?
Recently I wrote about the process through which a creditor can assert a claim against an estate and noted that Minnesota Statute 524.3-805 prescribes the order of priority for payment of claims from the probate estate. However, there is certain property that is exempt from creditors’ claims.
Homestead
Under Minnesota law, the home can pass to the decedent’s surviving spouse, children or descendants free of claims, except the following:
- Valid claims attached to the property at the date of the decedent’s death (e.g. a mortgage);
- Claims for state hospital care; and
- Claims for medical assistance benefits (Minn. Stat. §524.2-402).
This means that the surviving spouse can remain in the home, even if he or she is not on the title to the home, subject only to any, or all, of the three types of claims mentioned above. If the decedent devised the home in his or her Will to someone other than the surviving spouse, the surviving spouse is still entitled to the home but may have to make an election to assert his or her right to the homestead.
Exempt Property
In addition to the homestead, a decedent’s surviving spouse or children are entitled to one automobile (regardless of value) and “…property not exceeding $10,000 in value in excess of any security interests therein, in household furniture, furnishings, appliances, and personal effects…” free from creditors’ claims (Minn. Stat. §524.2-403). Any rights granted to a decedent’s adult children under the exempt property statute will not have priority over claims from state-operated services, county relief, medical assistance, or claims under Minn. Stat. §524.3-805(a).
Family Allowance
Lastly, a decedent’s surviving spouse, minor children or dependent children are entitled to a family allowance from the probate estate. The personal representative of the estate determines the amount of the family allowance, which cannot exceed $1,500.00 per month. If the estate is solvent, the family allowance is allowed for a period of eighteen months. If the estate is insolvent, the family allowance is allowed for a period of one year.
Do not hesitate to contact an attorney if you have any questions at the beginning of a probate to determine what property is exempt and what property you, or others, are entitled to free of creditors’ claims.
