Minnesota Estate Tax Cases
Last updated: 20 Oct 2025 •
Minnesota Estate Tax — Case Notes & Practitioner Commentary
Minnesota’s modern estate tax regime appears in Minn. Stat. ch. 291 with administrative guidance from the Department of Revenue (DOR). Reported appellate decisions focused squarely on Chapter 291 are relatively few; in practice, advisors anchor positions in the statutes, DOR instructions for Form M706, and federal conformity provisions. Below are “authorities-first” case-style notes on the issues that most often matter in filings and audits.
Framework & Federal Conformity (Minn. Stat. ch. 291)
What it’s about
Chapter 291 establishes Minnesota’s estate tax base, conformity touchpoints to the federal taxable estate, and mechanics for resident and nonresident estates.
Holding / Rule
Minnesota computes a state estate tax using a Minnesota-taxable estate derived from the federal system, subject to state-specific provisions (e.g., filing thresholds, subtractions, administrative rules).
Comment
When citations are thin, start with statutory text and the DOR instructions for Form M706. Reference federal schedules for valuation, deductions, and marital/charitable planning, then reconcile any Minnesota-specific departures (e.g., qualified small business/farm property subtraction where applicable).
Nonresident Situs & Apportionment (Chapter 291 — Situs Definitions)
What it’s about
Nonresidents are taxed on Minnesota-situs property. Real property is taxed where located; tangible personal property generally where kept; most intangibles follow domicile absent special rules.
Holding / Rule
Tax applies to the Minnesota portion only. Returns typically mirror federal schedules and then apply Minnesota situs/apportionment logic to limit liability to Minnesota assets.
Comment
Title, possession, and location evidence matter. For art or high-value tangibles temporarily in Minnesota, document location history carefully. Coordinate with the Nonresident Guide for examples and filing workflow.
State QTIP & Portability Elections (Practice)
What it’s about
Minnesota allows marital-deduction planning aligned with federal concepts. In practice, estates may rely on QTIP elections and coordinate with federal portability mechanics as recognized by the DOR.
Holding / Rule
QTIP and related marital deductions generally follow federal eligibility; documentation/election consistency on the Minnesota return is critical to sustain deferral and survivor planning outcomes.
Comment
Keep election statements with the Minnesota filing; ensure trustee/accounting records support QTIP income requirements. Confirm DOR procedures for any state-level QTIP conformity before assuming an outcome.
Administration Expenses, Claims & Probate Timing (Practice)
What it’s about
Deductibility of administration expenses and claims depends on supportable valuation, proper documentation, and probate timing.
Holding / Rule
Court treatment of claims/fees affects deductibility. The DOR expects substantiation consistent with federal rules (orders, invoices, proof of payment) for the Minnesota return.
Comment
Calendar creditor windows and approval steps early. If a claim is denied or late, consider the impact on the Minnesota base and whether amendment is practical.
Valuation & Alternate Valuation Date (Practice)
What it’s about
Fair market value at the valuation date drives both federal and Minnesota computations, with the option to consider alternate valuation timing consistent with federal rules.
Holding / Rule
Minnesota relies on federal valuation scaffolding; robust appraisals for Minnesota real property and high-value tangibles are essential to defend the reported base.
Comment
Local market dynamics can be variable. Engage qualified Minnesota appraisers; reconcile federal and Minnesota attachments to avoid mismatch questions.
References
- Minnesota Statutes — Chapter 291 (Estate Tax): state framework, resident/nonresident mechanics, definitions.
- Minnesota Department of Revenue — Estate Tax page: Form M706 & instructions, elections, attachments, and filing mechanics.
- IRS Form 706 & Instructions (federal reference for conformity points).
- Probate court practice materials (Minnesota Judicial Branch) — timing and approvals affecting deductions (practice reference).