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Probate and Estate Litigation Blog

Questions of residency in estate administration

For some Minnesotans, the question of where to open an estate may be a bit complicated if the estate owners pass away with assets located in more than one state. For example, some residents in the Twin Cities area may split their time each year between two homes, one in Minnesota and one somewhere else. So where should the legal distribution of assets take place if it isn't clear exactly where the estate owners held permanent residency?

Careful estate planning prior to one's death will help ensure that there isn't too much ambiguity in this regard. However, when estate planning is put off, those who eventually handle the estate may be left with some questions.

Minnesotans should know that state law governs probate and estate administration, so residency is a very important factor since the laws in each state can vary. The easiest way to start thinking about determining residency is to ask where the estate owners spent most of their time. If they spent February and March in a warmer state and the rest of the year in Minnesota, then they are likely Minnesota residents. If their time was basically split down the middle between Minnesota and somewhere else, then the state in which the decedents filed state income taxes is probably the best indicator of where estate administration should take place.

If the estate includes two homes in two different states, then the decedent might have filed for a homestead exemption for one of the residences. In that case, wherever the exemption was filed is probably where the estate should be administered.

When a person owns real estate in a place that is not the home state, then sometimes establishing an ancillary estate is necessary. Because ancillary estates are essentially probate estates outside of the decedent's home state, ancillary estates are often time-consuming and expensive. Dealing with an ancillary estate involves conducting estate administration in separate two courts.

One way for estate planners to anticipate this somewhat complicated situation is to create a trust that will hold the title to both homes. That way the trust can be dealt with in one court instead of two.

Source: nwi.com, "ESTATE PLANNING: Questions of residency," Christopher Yugo, Jan. 22, 2012

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