Closing on a Minnesota Home or Cabin This Summer? The 3 Estate Planning Steps You Can’t Ignore
It’s summer in Minnesota, and that means three things are in season: patios, mosquitos, and real estate. Whether you are signing the closing papers on a new family home, a townhome in downtown Minneapolis, or the classic "Up North" cabin on one of our many lakes, holding those new keys is an incredible feeling.
But that feeling can also come with stress. Amidst the whirlwind of home inspections, moving trucks, and window treatments, there is one crucial step that often gets left behind with the bubble wrap after the boxes are unloaded: updating your estate plan.
If you don’t plan accordingly, your family could find themselves facing a time-intensive, costly detour through a Minnesota probate court.
So before you fire up the grill or slather on that sunscreen, take a few minutes to ensure your new investment is fully protected with these three essential steps.
1. Look Closely at How Your Deed is Titled: Joint Tenancy vs. Tenancy in Common
When you buy real estate, you own it in a specific legal capacity. For most buyers, property ownership falls into one of two categories: joint tenancy or tenancy in common. Joint tenancy is common for married couples. If one owner passes away, ownership automatically transfers to the surviving co-owner without needing court approval. This avoids the probate process.
Tenancy in common is often the default if you buy a property with a sibling or a business partner or as an unmarried partner. In this case, each person owns a specific percentage. Therefore, if one owner passes away, their share doesn't go to the co-owner; rather, it goes to their own heirs. There is no right of survivorship in this situation.
It’s important to note that in Minnesota if a deed doesn’t specify that a property is under joint tenancy, the law assumes tenancy in common.
2. Bypass Court Delays with a Transfer on Death Deed (TODD)
If you want a straightforward way to keep a single family home out of the courthouse, a Minnesota Transfer on Death Deed (TODD) can be a smart choice. A TODD allows you to name exactly who should receive the property when you pass away. Another benefit is that a TODD allows your beneficiary to bypass the probate process for the real estate.
In Minnesota, a legal TODD needs to be drafted and recorded with the county recorder’s office before your death. It cannot be changed retroactively. This gives you complete control while you are living. The beneficiary doesn’t have any rights to your home until after your death. You can sell it, refinance it, or revoke the deed entirely. You can even hang that wallpaper you’ve had your eye on without permission of the beneficiary.
3. Establish a Plan for the Family Cabin
Whether it’s a huge mansion on Lake Superior or Lake Minnetonka or a smaller cabin on Lake Winnie or Seagull Lake, in Minnesota, a cabin isn't just a piece of real estate—it’s a culture. But leaving a lake house to multiple adult children equally can accidentally create a battleground over property taxes, maintenance costs, and peak weekend calendars.
Because cabins are often meant to last for generations, a simple TODD or a standard will isn't always the best choice. Instead, many families use a specialized cabin trust or Cabin LLC or revocable living trust. (Bonus: This is a great choice if you own properties in multiple states because your out-of-state properties can easily be moved into your trust.)
These options can act as an instruction manual for the property that can clearly dictate the ins and outs of cabin ownership. A trust or LLC can determine how ongoing expenses (utilities, dock maintenance, roof repairs) are funded. You can use the trust or LLC to decide what will happen if one family member wants to sell their share when the others want to keep the cabin in the family. A trust or LLC can even set up a scheduling rotation for that coveted Fourth of July weekend each summer.
By establishing these rules now, you ensure the family cabin remains a place of rest, not stress.
Your Summer Real Estate Checklist
If you bought real estate this year, make sure you can check these items off your list before the season ends:
Review your final closing deed to confirm the ownership (Joint Tenancy vs. Tenancy in Common).
Draft and Record a Transfer on Death Deed if you want a direct, cost-effective way to pass a home to your beneficiaries.
Consider a trust or LLC structure if you are managing a shared family cabin or multi-generational property.
Notify your estate planning attorney to formally link the new asset to your existing will or trust.
Enjoy the Summer, Secure Your Legacy
Buying real estate is a major milestone. Protecting it doesn’t have to be overwhelming, but it does require a plan. Before you completely unpack your family photos and cherished fishing rod collection, make sure the legal paperwork matches your long-term goals.
Ready to align your new home or cabin with your estate plan? Contact Miroslavich Law today to schedule a comprehensive deed and estate planning review as you sail into summer.
