The Qualified Small Business Deduction (“QSBD”) under Minn. Stat. § 291.03, provides an additional deduction for Minnesota estate tax purposes for the value of qualified small business property passing to a qualified heir. The statute was originally enacted in 2011 (and has subsequently been updated). [click to continue…]
In Minnesota, many homeowners can qualify their primary residences for homestead status. By classifying a piece of property as a homestead, the property may qualify for a reduced classification rate, a reduced taxable market value, a property tax refund, and/or other special program eligibility.
To qualify for homestead status, the following criteria must be met:
- The applicant must be an owner of the property;
- The applicant must occupy the property as their primary residence; and
- The applicant must be a Minnesota resident.
A homestead classification can be sought as soon as a person takes ownership of a piece of property and meets the criteria above. An application for homestead is made to and approved by the County Assessor in the county where the property is located. For most counties, an application can be found on the County’s website.
This classification can be applied for any time during the year; however, if the application is made by December 15th and then approved, property taxes payable in the following year will reflect the classification rate.
Homestead classification often comes up in the estate planning context when a revocable trust is used and a grantor’s home is titled into the trust. When this happens, homestead classification needs to be re-applied for on the piece of property since the property now has a new owner, the trust.
For more details on whether your Minnesota piece of property qualifies for homestead status, contact your County Assessor.
A married couple, of which each spouse has children from previous relationships, faces certain issues with regard to distribution of their estates. The most basic of these issues involves what happens if a spouse dies without a will. When any individual dies without a will, the statutory rules for the intestate succession dictate the distribution of the deceased person’s probate property  upon death. This is a basic primer for how the Minnesota Intestacy Statute is applied when a spouse who has children from a previous relationship dies without a will.
First, the surviving spouse receives a life estate in the homestead  with the remainder interest passing to the deceased spouse’s descendants by right of representation. If the homestead is titled jointly, then it passes to the surviving joint owner. The surviving spouse is also entitled to (1) a family allowance (described by Jen Santini here), (2) $10,000 of personal property (see exempt property also in Jen’s article), and (3) one car regardless of value.
In addition to the above distributions, the surviving spouse receives $150,000 plus one half of the remaining assets in the probate estate. The other half passes to the deceased spouse’s descendants by right of representation. Read more about
Blended families face numerous additional estate planning issues involving incapacity planning and the distribution of assets upon death. I encourage any married couple with children from a previous relationship to seek the advice of an attorney.
 Probate property is comprised of assets titled in the deceased person’s name as sole owner and without (1) a beneficiary designation or (2) other non-probate transfer on death designation for such assets. For example, an account with a beneficiary designation will not be subject to the intestacy statute described above and will pass to the designated beneficiary on file with the account. Joint property passes to the surviving joint owner. Read more about titling real estate here.
 If both spouses own the homestead in joint tenancy, then it is not a probate asset and it passes directly to the surviving spouse.
If you wish to read the actual statutes, see MN Statutes 524.2-101, 524.2-402, 524.2-403, and 524.2-404