For the most part the laws in Minnesota regarding the transfer of property are exactly the same as they are in the majority of other states. There are several different ways to transfer property to a relative in Minnesota. The way you choose may be based on tax considerations or on personal motivations.
For the most part the laws in Minnesota regarding the transfer of property are exactly the same as they are in the majority of other states. There are several different ways to transfer property to a relative in Minnesota. The way you choose may be based on tax considerations or on personal motivations. Property can be transferred either before death or after death--preferably through a will. How property is owned before a death occurs also can affect its transfer. For large, complex estates, it may be advisable to seek the counsel of a real estate attorney, but for small, simple property transfers, an attorney may not be necessary.
Decide which relative will receive your property--or a percentage of your property. It is important for the person who owns the property to be clear about which properties are to be transferred and to which relatives.
Write a will detailing which property will be transferred to which relative upon your death. This assumes you have decided to wait until your death to transfer your property. Writing a will may require the assistance of a real estate attorney unless all property transfers are simple and straight forward. There are no difference between transferring property via a will in Minnesota as opposed to any other state.
Give your property to a relative before your death but retain a life estate. This allows you to live in and use the property during your lifetime even though you technically no longer own the property. Upon your death the property automatically transfers to the relative you gave it to without going through probate, a court process for determining who inherits property, or paying inheritance taxes. Since life estates involve a joint ownership of the property, which can cause legal complications, it is recommended that a real estate attorney be consulted before using this option. Life estates are the same in Minnesota as in all other states.
Creating a Transfer on Death Deed, also known as a T.O.D.D. A T.O.D.D. automatically transfers title to your property to the person you designate upon your death. In Minnesota you retain ownership of your property and have control over it until your death. This is not true in all states, but is the law in Minnesota.
Execute a deed for joint tenancy. Under a joint tenancy, two or more people have an undivided 100 percent interest in a property so after the death of one person, the property automatically transfers to the other. Joint tenancy must be spelled out in the property's deed, whether you are transferring property in Minnesota or in any other state. If joint tenancy is not spelled out clearly in the deed, hire an attorney to add in the proper language.
Property can be gifted to a relative in Minnesota but this can cause unwanted tax problems. If the property is gifted, then the cost basis (the value) of the property remains the same as it was before the gift. This means that if the new owner sells the property, they will have to pay tax on the difference between the (low) value caused by the gifting and the ultimate sales price. This problem is not unique to Minnesota, but is part of the U.S. tax code. It is recommended that a real estate attorney help with the gifting of any property.
- Transferring property in Minnesota can have unexpected tax consequences. It is recommended that a real estate tax attorney be consulted before attempting any property transfer in Minnesota.