Undivided interest in real estate is when an heir passes away the property is divided equally among the beneficiaries. Farms in particular can be an issue for the beneficiaries because farms tend to have a low basis when purchased or inherited several decades ago, now has a significant gain. If the investment is deeded to the heirs during their lifetime, they are going to owe taxes on that gain. As a result of this, property is commonly held until death where the property is valued at the time of death and thereby no capital gains are owed. This can become an issue when one of the beneficiaries does not want to keep their portion of the real estate. To avoid this problem, it’s good idea to create a Real Estate Partnership agreement. This legal agreement solves this situation where there might be several beneficiaries involved and any of them do not want to be included. Attorney Neil Jensen discusses undivided interest in real estate and creating Real Estate Partnership agreements on KDUZ 1260 AM’s show “Legal Update.”
Neil Jensen is an experienced estate planning and probate attorney based in our Hutchinson, MN law office. Our goal is to truly listen to our client’s situation and create a plan that meets their goals and priorities. Contact our estate planning and probate attorneys at 320.587.2046 to discuss your specific situation.