Real Estate “Transfer on Death Deed”
Transfer on death deed is a useful estate planning tool for real estate owners of Minnesota. Minnesota’s transfer on death deed is governed by Minn. Stat. 507.071. A transfer on death deed, also known as a TODD is a piece of paper, which contain information about who will get your real estate property on your death without the requirement of seeking approval from a probate court.
Transfer on death deed does not convey any current or future rights or interest in the real estate property to the beneficiary until the owner’s demise. Therefore, the interests of the owner are completely secure while he/she remains alive. However, under Minn. Stat. 524.2-702, the beneficiary named in the TODD must outlive the owner by a minimum period of 5 days in order to achieve entitlement to the property. The owner holds complete title to and control over the property until death. Under Minn. Stat. 507.071, subd. 10, the owner may rent, use, sell or convey the real estate property at will and with no obligation to the beneficiary. Consequently, the beneficiary has no guarantee of any current or future interest in the property. Moreover, under Minn. Stat. 507.071, subd. 19, a “transfer on death deed that is executed, acknowledged, and recorded in accordance with this section is not revoked by the provisions of a will”.
Transfer on death deed allows flexibility to the owner under Minn. Stat. 507.071, subd. 9, as he/she can “transfer an interest in real estate property to the trustee of an inter vivos trust even if the trust is revocable, to the trustee of a testamentary trust or to any other entity lawfully qualified to hold title to real estate property”. For instance, a TODD can transfer real estate property to more than one individual or entity such as a church or a charity. The owner can use a TODD to transfer the family house in equal shares to all his/her children. Every child is a grantee beneficiary.
Under Minn. Stat. 507.071, subd. 8, a transfer on death deed should be either filed or documented, in the proper country real estate office in Minnesota before the owner’s demise in order to achieve the objective of avoiding probate upon the death of the owner with respect to any real estate property interest identified in the TODD.
If all the requirements are fulfilled, a TODD will become active upon owner’s demise. However, the transfer will be subject to all outstanding liens and encumbrances affecting titles, which include any claim for settlement of medical assistance expenditures incurred on behalf of the owner.