Adult Daughter's Homestead Claim Against Deceased Mom's Estate Trumps Foreclosure Rescue Operator

The following facts are taken from a recent ruling of the Minnesota Court of Appeals ('Yennie' = foreclosure rescue operator; 'Wolf' = now-deceased homeowner):

• Yennie's claim against the estate is based on a written agreement that he and Wolf executed in August 2004. The agreement, which is entitled "Investment Agreement Conveying Partial Interest in Real Property," relates to Wolf's home in the city of Plainview.
  
  The agreement provides that Yennie will assist Wolf in redeeming the property from foreclosure, make payments to bring the mortgage up to date, and perform repairs to the house in anticipation of its sale.
  
  The agreement further provides that, upon the sale of the property, Wolf would receive the first $47,500 in proceeds; Yennie then would receive reimbursement for the expenditures he made; and Wolf and Yennie then would evenly split the remaining proceeds.
  
  Wolf died intestate on January 22, 2010. Yennie filed a claim against the estate in the amount of approximately $28,000, which reflects expenditures he made pursuant to the 2004 written agreement.
  
  The personal representative disallowed the claim. Meanwhile, Wolf's daughter, his only surviving heir, filed a [statutory homestead] claim against the estate in the amount of $10,000.

In applying Minnesota law, the state appeals court held that, by reason of the homestead provisions in the state statute, Wolf's daughter was entitled to priority over the claim made by Yennie for the $28,000 he shelled out to fix up Wolf's home and pay the bills.

Inasmuch as there was insufficient money in this case to pay off all the claims made against the estate, and Wolf's daughter cashed out on her $10,000 homestead claim in full, Yennie was consequently left partially holding the bag on his claim, entitled to split whatever was left in the estate with one other claimant, and pocketing only a fraction of what he ponied up to fix up the home of the now-deceased homeowner.

For the ruling, see In re Estate of Wolf, No. A10-2029 (Minn. App. June 20, 2011) (unpublished).