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I am getting conflicting information, my lawyer says the house proceeds cannot be used to pay expenses of administrative needs of the estate, but the Will says that expenses of administrative are to be paid out of the estate (along with expenses of last illness, taxes, and some other things).
Nobody else I've talked with has heard that house proceeds cannot be used to pay estate expenses.
I always thought once the house is sold, the check gets put into the estate bank account, and from there I pay bills (including the lawyer bills which are considerable).
The lawyer says only MERP gets any house proceeds. I think that is contradicting what the Will says, and what my parents intended.
What have other people done, I am thinking I need to find a different lawyer at this point.
How else would expenses of estate administration get paid, if not from proceeds of house sale? Everything else had beneficiaries designated. And the real estate agent gets paid from the house proceeds so why not the lawyer and a few other bills.

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Yes there is still a mortgage, and they will get the usual pay-off at closing. House is in need of further repair (or price reductions) before it can sell (radon and another issue). But the whole thing is not in Probate -- everything had a designated beneficiary, and contents of.house were not enough value to meet required probate level. However, if the will is contested it could wind up in Probate -- but there won't be any money to pay legal bills without the house proceeds, so, again, it all seems very unworkable. A good solution would be to just get the house sold and not be entertaining questions which require lawyers to hum and haw about the answer.
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Just like Medicaid's regulations, probate rules are state dependent.

My mom's state (TX) is a Level of Claim probate state and paid in order of level. Her estate has class 1, 2, 3 & 7 claims. Class 7 btw is the class for MERP. For her state, my understanding & experience is that Judges determine what is a reasonable compromise if that is needed to settle the estate within the time period allowed (4 years) for probate to be open once Letters Testamentary issued. What I (& others) have been advised to do is to provide documentation in detail for all costs that could be reasonably be included a Class. In addition, within TX Admininstrative Code all reasonable costs documented & associated with the property are deductible from any MERP claim. At some point, probate becomes a negotiation if the assets of the estate will not cover all claims. The house is considered an asset of the estate as it was entered as such within the initial inventory. For a low value or modest house, amount could be very small from which to settle all claims. Probate can be a waiting situation with which eventually someone blinks.

Mallory - I'd suggest you ask your atty if you can enter a claim for all your costs to deal with the house & any funeral costs since mom died. Also ask that IF you do not pay your atty's bill from this point on, does he file a claim against the estate?

Also Isn't there a mortgage on the house? or am I getting your situation mixed up with another? If so, How is the mortgage being paid or has it been paid off via a insurance policy set up to do that?
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the key words in the Statute are "other than". So if there are no spouse or children (or grandchildren or nieces or nephews) to inherit anything, if the house is supposed to go to a charity, or the live-in boyfriend who is not the spouse, then the house proceeds can have deductions for estate admin, lawyers, bills, etc etc.
The only way around this as I see it, is at the closing, where the real estate agent gets paid their 7 percent fee, and there are oodles of other things that get paid....but all these things are "house-related" (mechanic's liens for example, would get attached to the title and be satisfied before the house can close, I assume AT the closing a check would be cut to them in the same way the real estate agent gets a check?).
The priority of claims in MN has #1 "class" being expenses of estate administration, which is lawyers as well as executors fee.
It may be that the only way to interrupt this crazy scheme is to send the whole estate to Probate court, and have a judge rule that the Will supercedes state law....but I doubt they would do that (?).
But this situation I find myself in, should lead EVERYONE to read up on their state's laws regarding "Descent of Homestead.". Because, unless there is a little account set up somewhere, in cash (perhaps some type of special Trust account?), which is solely designated to be used by the executor to use for the estate administration expenses, bills of last illness, etc, there is not going to be any way to "administer" the estate.
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Sorry. I goofed. That provision applies to a trust of which the descendants are the beneficiaries. Sorry. I'll reread it again to see what I can figure out.

I'm just wondering if the will was drafted before that statutory provision went into effect, but that doesn't make sense either. All the Wills I've seen have the provision that last expenses, which are expenses of the estate as I interpret it, are to be paid first before any distribution to heirs. The question would be whether the challenges of your siblings are legally considered last expenses of the estate.

I've just spent some time trying to find something addressing priority of claims and can't find anything on point, not to say that it's not there, I just can't find it.
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My mom's trust, granted a different sort of document, will excludes any decedents that challenge the trust and lose. Interesting in my case. All attorney fees paid by my mom in an effort for sibs to deny payment to me, should exclude them from any proceeds upon mom's death. They lost in court, I was required to be paid albeit a very minimal amount for four years of 24/7 care. The trust includes language that everyone providing a service is to be paid from the trust and that nobody should spend money for mom's benefit and not be repaid.
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Mallory, I took just a quick look at the statute. I'm not a lawyer, just a former paralegal and contract administrator, but I think this is the valid provision:

"If the homestead passes to a person other than a spouse or decedent's descendants or to a trustee of a trust of which the spouse OR THE DECEDEN'TS DESCENDANTS ARE THE SOLE CURRENT BENEFICIARIES, it is subject to the payment of expenses of administration, funeral expenses, expenses of last illness, taxes, and debts. "

I noticed this provision doesn't address payment to lawyers of challenges by siblings. Hmmmmm....

So in this attorneys interpretation, he gets paid, but the expenses of the last illness don't? I hate to say it but this sounds very self-interested and deliberately misinterpretive of the statute.

I'm going to re read it later to see if I missed anything, but my gut reaction is that this attorney is wrong.

Am I correct in assuming, however, that this attorney is the one who's reviewing all the requests from your siblings, for your action, and is getting paid from estate proceeds?
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the lawyer is quoting MN Statute 524.2-402, Descent of Homestead, https://www.revisor.mn.gov/statutes/?id=524.2-402
According to the lawyer, the house (which is stated in the Will to be given to the children in equal shares) can only be sold and then 100 percent of the proceeds--without one cent of deduction for estate administration expenses-- has to be split 20 percent for each child. So essentially, even though the real estate agent will get 7 percent, and any mechanics liens, or back taxes, get paid out of the house proceeds, I cannot attach any bills for lawyer's bills, or other estate administration expenses.
But this seems REALLY strange to me. I was operating under the assumption that the WHOLE estate, whatever that consisted of, would get dumped into the estate bank account, THEN expenses paid, and divided 20 percent.
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If the home proceeds cannot be used, siblings retained the lawyer for review, correct? Stop paying the bills and tell attorney that siblings are responsible.
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Mallory, something doesn't sound right. I would think if there is no lien on the house [such as Medicaid] that the proceeds from the sale of house goes to close out any estate bills.... then what is left goes to the heirs. Unless there was a Reverse Mortgage, to which the loan has to be immediately paid, unless the heirs can refinance to pay off the mortgage.
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NO, the parents were not on Medicaid. The family home is all that is left, because of my siblings stupid requests, they are digging into all past records, and turned it all over to the lawyer, who costs a ton of money to review it all, I have nearly exhausted the tiny Estate checking account with lawyer bills.
So all that is left is the house, and the lawyer did NOT tell me from the outset that the house proceeds cannot be used to pay any bills!! OMG!!
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I do believe that MERP's claims, if applicable, come ahead of what the will says. I believe your loved one signed to agree to that when accepting Medicaid.

The kind of lawyer you need to talk to about this is one certified in Elder Law. He or she should not only be very knowledgeable about this kind of situation but also be used to explaining it to clients.

If your parents were on Medicaid, I am surprised there is much to leave to beneficiaries besides the house. And if they weren't on Medicaid, MERP is not involved.
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Yes, Mallory, I think you should request a free consult with another attorney. Or you could ask the question of the Bar Association. Maybe there is not something the attorney is explaining well. How else would these attorneys get paid?!
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