TRANSFER ON DEATH DEEDS
Kyle R. Bailey, Esq.
Effective August 1, 2008, planning your estate just got easier for anyone with real estate in Minnesota. This new Transfer on Death Deed (TODD), once executed by you and filed in the county where the real estate is located, transfers the real estate to the named beneficiary at your death. If the property is co-owned with others, transfer to the beneficiary takes place at the death of the last surviving co-owner.
The TODD is one more tool to assist you in avoiding the process of probate. The concept is very similar to naming a beneficiary on your IRA, 401(k) or other qualified plan or listing a beneficiary on your mutual fund or bank account with a transfer on death beneficiary designation (TOD beneficiary) or pay on death beneficiary (POD beneficiary) on your bank account. Like those beneficiary designations, you must fill out the right paperwork and file it to establish the beneficiary. The following explains more details of a TODD and what happens if more than one owner or beneficiary is involved.
Effect of a Mortgage or Other Lien on the Property. A TODD transfers any mortgage, judgment or other lien to the beneficiary upon the death of the owner.
Multiple Joint Owners. If the real estate is owned by joint tenants, a TODD conveys the real estate to the beneficiary only after the death of the last surviving joint tenant.
Multiple Beneficiaries. You may have multiple beneficiaries take title as either joint tenants, as tenants in common or in any other form of ownership or tenancy that is valid under Minnesota law.
Successor Beneficiares. A TODD may also list one or more successor beneficiaries or a class of successor beneficiaries. If this approach is used, the deed shall also state under what conditions the real estate will pass to the successor beneficiaries.
Revocation or Modification of TODD. A TODD may be revoked at any time by the owner or if there is more than one owner, any one of the owners.
Now that the TODD is available to owners of real estate in Minnesota, a new opportunity to simplify your planning is available. For a TODD to be valid, it must actually be recorded with the county before the death of the owner. If you think this option may be for you, contact me for more information.
The information in this article is not intended as tax or legal advice. You are encouraged to seek tax or legal advice from an independent adviser.