This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2006).
STATE OF MINNESOTA
IN COURT OF APPEALS
In re the Estate of:
John G. O’Neil, Decedent.
Filed April 24, 2007
Isanti County District Court
File No. 30-P5-04-1488
David K. Snyder, Joshua D. Christensen, Eckbert, Lammers, Briggs, Wolff & Vierling, P.L.L.P., 1809 Northwestern Avenue, Suite 110, Stillwater, MN 55082 (for appellant Doris O’Neil)
Travis D. Stottler, Jonathan R. Cuskey, Miller Law Office, P.A., 26357 Forest Boulevard, Suite 6, P.O. Box 807, Wyoming, MN 55092 (for respondents Donald Larson and Michael O’Neil)
Considered and decided by Dietzen, Presiding Judge; Randall, Judge; and Hudson, Judge.
Appellant challenges the district court’s judgment, which denied her objection to the inventory and final account of the estate, arguing that the district court erred in allowing payment of the expenses of administration from the homestead and awarding respondents attorney fees. Because homestead assets are statutorily exempt, we reverse.
Decedent, John G. O’Neil, died with a will in November 2004. Appellant, Doris O’Neil, is the natural guardian of Amy O’Neil, who is decedent’s only child. Because the marriage had been dissolved, decedent had no surviving spouse. Amy O’Neil was not mentioned in decedent’s will, but by operation of the laws of intestacy, she is the sole heir of decedent and the sole beneficiary of the estate. The will designates decedent’s sister, Mary Ann Hunstad, as the personal representative of the estate; and the decedent’s brother, Michael O’Neil, is the designated alternative.
In November 2004, appellant, who was unaware that decedent had a will, filed a petition to adjudicate the intestacy of decedent and appoint herself as the personal representative of the estate. In December 2004, respondent Michael O’Neil filed a petition objecting to appellant’s appointment as personal representative and filed a petition to probate decedent’s will. In February 2005, the district court appointed respondents Donald Larson and Michael O’Neil as co-personal representatives of the estate. In June 2005, the representatives sold decedent’s home and later submitted an inventory of the estate.
Appellant objected to the inventory and final account of the estate, asserting, inter alia, that respondents lacked authority to pay expenses of the estate from the proceeds of the homestead sale, that the inventory improperly included decedent’s pickup truck and other personal property, that the personal representative was not entitled to compensation,
and that the attorney fees were excessive. Following a hearing, the district court issued findings of fact, conclusions of law, and an order for judgment denying appellant’s objection to inventory and final account. The district court held that the personal representatives acted in accordance with “[d]ecedent’s intentions as expressed in his last will and testament” and the statute by “selling the real property of the estate for the benefit of interested persons” and ordered the estate to pay the attorney fees and other administrative expenses. This appeal follows.
D E C I S I O N
Appellant argues that the district court erred in allowing the payment of administrative expenses from assets that are statutorily exempt under the homestead exemption of Minn. Stat. § 524.2-402 (2006).
interpretation is a question of law, which this court reviews de novo.
Minn. Stat. § 524.2-402(c) provides:
If the homestead passes by descent or
will to the spouse or decedent’s descendants, it is exempt from all debts which
were not valid charges on it at the time of decedent’s death except that the
homestead is subject to a claim filed pursuant
to section 246.53 for state hospital care or 256B.15 for medical assistance benefits.
The statute is consistent
A. Application of the Statute
Respondents argue that the homestead exemption does not apply because the homestead was not specifically devised to Amy O’Neil. But the statute exempts homesteads from most categories of debt, whether received “by descent or will.” Thus, the statute does not differentiate between a homestead that passes by a specific devise and one that passes as a part of the residuary estate.
O’Neil is entitled to take by the operation of the laws of intestacy. Thus, the homestead should have passed
to her “exempt from all debts which were not valid charges on it at the time of
B. Intent of the Will
Respondents argue that the will specifically authorizes payment of administrative expenses from the proceeds from the sale of the homestead. The will provides:
My personal representative shall pay from the residue of my estate the expenses of my last illness and funeral, valid debts including any taxes owed by me at my death, expenses of administering my estate, including non-probate assets, and any estate and other death taxes, except any generation skipping transfer tax, which become due because of my death, including any interest and penalties. There shall be no apportionment of any such taxes, and I waive on behalf of my estate any right to recover any part of them from any person, including any recipient of property passing apart from this will.
The will also gives the personal representative “the power, exercisable without authorization of any court . . . to sell at private or public sale . . . any or all of the real or personal property of my estate.”
The intention of a testator is to be
followed, if it is not inconsistent with the rules of law. In re
Tuthill’s Will, 247
provisions of a will authorizing the payment of debts are not sufficient to
authorize payment from homestead proceeds.
Overvold v. Nelson (In re Estate
of Overvold), 186 Minn. 359, 366, 243 N.W.
439, 442 (1932) (holding that debts are not chargeable against homestead if
will includes general provision for the payment of debts); Larson v. Curran (In re Norseth’s Estate), 121
decedent’s will repeats “purely formal phrase[s],” which are not sufficient to show an
intent to forfeit the homestead protections.
C. Authorization of
Respondents further argue that the statutory authority to sell the homestead contemplates the authority to use the proceeds to pay expenses of the estate. Respondents rely heavily on the 2006 amendment to Minn. Stat. § 524.3-715, subd. 23 (2004), which authorizes the personal representative to:
sell, mortgage, or lease any real or personal property of the estate or any interest therein, including the homestead, exempt or otherwise, for cash, credit, or for part cash and part credit, with or without security for unpaid balances, and without the consent of any devisee or heir unless the property has been specifically devised to a devisee or heir by decedent’s will, except that the homestead of a decedent when the spouse takes any interest therein shall not be sold, mortgaged or leased unless the written consent of the spouse has been obtained.
Appellant concedes that the sale of the homestead was authorized by Minn. Stat. § 524.3-715, but argues that statute does not authorize or address the use of proceeds from the homestead to cover expenses of administration. Respondents argue that the statute’s authority to sell the homestead necessarily includes the right to use the proceeds to pay the administrative expenses.
legislature clearly intended if there is a surviving child of the decedent, the
proceeds of a sale of a homestead would be exempt from the reach of
We see no
conflict between Minn. Stat. § 524.3-715, which gives the personal
representative the right to sell the homestead, and Minn. Stat.
§ 524.2-402, which exempts the homestead from the estate for purposes of
This result is further supported by our state’s expressed policy of protecting the interests and expectations of surviving spouses and children. See Riggle, 654 N.W.2d at 714 (noting that courts are to liberally construe homestead laws). If a personal representative was permitted to unilaterally sell exempt property and then treat the proceeds of the sale as non-exempt, the protections of the homestead exemption would be wholly eviscerated. Thus, in order to give effect to the homestead provision, we interpret Minn. Stat. § 524.3-715 to authorize only the sale of a homestead and do not read into it any authority to convert the proceeds of the sale to a non-exempt asset.
further argue that Amy O’Neil failed to timely object and, therefore, impliedly
authorized the sale and use of the proceeds to pay the costs of administration. A waiver of an existing property or legal
right is not favored and must be clearly shown. Overvold, 186
Appellant argues that certain personal property of the estate is exempt under Minn. Stat. § 524.2-403 (2006). The estate included personal property valued in the final inventory at $11,000.
By statute, if there is no
surviving spouse and the decedent’s children were not intentionally omitted
from the will, such children are entitled to “(1) property not exceeding
$10,000 in value in excess of any security interests therein, in household
furniture, furnishings, appliances, and personal effects . . .; and (2) one
automobile, if any, without regard to value.”
Amy O’Neil was a minor, the personal property is exempt from
administrative expenses. The personal property listed in the final account totaled $11,000, including a truck. The truck itself is an exempt asset, without regard to its value.
Appellant argues that the district
court erred in awarding attorney fees, and that the fees incurred by respondents
and paid out of the sale of the homestead were not reasonable or necessary. A district court’s determination of attorney
fees and costs in a probate matter is reviewed for abuse of discretion. In re
Estate of Martignacco, 689 N.W.2d 262, 271 (
 Mary Ann Hunstad declined the appointment as personal representative.
Both before and after amendment, the statute permitted the sale of “any real .
. . property.” With amendment, “any real
. . . property” has been clarified to include the homestead. See
This general statute is not part of the probate code and is instead codified in
the statutory chapter addressing property interests and liens. But when the probate statutes are lacking, “