The Restructuring Report

COVID-19 has caused the greatest loss of jobs since the Great Depression. The unemployment rate recently exceeded more than 15 percent. Economists estimate that 40 million people have lost their jobs. Economists also estimate that more than 40 percent of those job losses will become permanent. The Congressional Budget Office projects that the unemployment rate will remain at or above 10 percent through 2021 and that it will take many years to recover all the jobs lost. Moreover, many others – business owners and those whose jobs have not been lost – have suffered significant reductions in income.

At this time, it is more important than ever for individuals to understand what assets are exempt – protected from claims of creditors. With that understanding, individuals can prioritize what assets they may need to tap to support continuing personal or business expenses – assets that are not exempt. Assets that are exempt should be utilized as a last resort. This understanding is also important for many other reasons as well, including estate planning.

In Minnesota, updated exemption amounts took effect on July 1, 2020. Of note, the Minnesota homestead exemption has increased to $450,000 and farmstead exemption has increased to $1.125 million. The following chart summarizes all the updated exemption amounts now available to individuals under Minnesota law:

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