Transfer on Death Deed

MINNESOTA TRANSFER ON DEATH DEEDS

What is a Transfer on Death Deed?
A Transfer on Death Deed (TODD) conveys real property to a designated beneficiary upon the death of the property owner. The TODD is executed by the owner and filed in the county where the real property is located. To be effective, the TODD must be recorded with the county prior to the owner’s death. However, the real property will remain in the owner’s name until their death. If there is more than one owner owning the property as joint tenants, the property will pass to the named beneficiary at the death of the last surviving joint tenant owner.  A TODD is like placing a beneficiary designation on your home.
 
TODDs are a relatively new tool in our estate plan toolbox. They became effective in Minnesota on August 1, 2008. TODDs are governed by Minn. Stat. §507.071.
 
Can Multiple Beneficiaries be Named?
Yes, a TODD can name more than one beneficiary. The TODD also states whether the beneficiaries are to own the property as joint tenants, tenants in common, or another valid form of ownership under Minnesota law.
 
The TODD may also name successor beneficiaries in the event the primary beneficiaries do not survive the property owner.
 
What Property Rights does a Beneficiary have Prior to the Owner’s Death?
A TODD beneficiary does not have any property rights until the owner passes away. Upon the owner’s death, the beneficiary will need to file an Affidavit of Identity and Survivorship for a Transfer on Death Deed, the owner’s death certificate, and a Clearance Certificate for Public or Medical Assistance Claim in order to have the property transferred into their name.
 
Why Use a Transfer on Death Deed?
If used under the right circumstances, a TODD may allow a person’s estate to avoid probate.    If a person’s only probate asset of significant value is their home, they may choose to execute a TODD thus allowing their home to pass directly to the named beneficiary without being subject to probate.
 
Is a Transfer on Death Deed Revocable?
TODDs are revocable. If a real property owner decides to execute a TODD today, but in a few years changes their mind on who the beneficiary should be, they can revoke the TODD or execute a new TODD naming a different beneficiary. Either the revocation or the new TODD would need to be recorded with the county prior to the owner’s death to be valid.
 
Does a Transfer on Death Deed Protect the Property from Creditors?
No, a TODD does not protect the real property from creditors. If there is a mortgage, lien, and/or a medical assistance claim or lien on the property, the beneficiary will take the property subject to any mortgages, claims or liens.
 
Is a Transfer on Death Deed Right for Me?
A TODD is not a good fit for every situation. You should speak with an attorney about your specific fact situation to determine whether a TODD is right for you.
 
If you have any questions about TODDs or general estate planning questions, please feel free to contact the author, Attorney Jill Ide at jillide@weikellaw.com or (763) 323-7676.