Transfer on Death Deeds in Real Estate Planning

This content discusses scenarios related to Transfer on Death Deeds (TODDs) in real estate planning, covering aspects such as joint tenancy, survivorship, multiple beneficiaries, and the impact of death on property ownership. The analysis explores the effectiveness of TODDs in different situations and offers guidance for proper handling of property transfers upon death.

• Real Estate Planning
• TODDs
• Joint Tenancy
• Property Transfer
• Estate Succession

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1. TODDs MCRA Torrens Workshop November 15, 2017 Presenter: Susan Ledray, Examiner of Titles, Hennepin County

2. 1. Fee Owner: Everett, married to Anne Transfer on Death Deed signed by Everett Smith, joined by Anne To Anne, upon my death and upon the death of Anne, to Jo Smith and Julie Smith.

3. Fee Owner: Everett, married to Anne Transfer on Death Deed signed by Everett Smith, joined by Anne To Anne, upon my death and upon the death of Anne, to Jo Smith and Julie Smith. 507.071 Subd. 4 may designate multiple grantee beneficiaries to take title as joint tenants, as tenants in common or in any other form of ownership valid under the laws of this state. Subd. 5 A TODD may designate successor grantee beneficiaries or a class of successor grantee beneficiaries or both, but must state the condition under which the successor beneficiaries interest would vest. Successor likely means in a defined situation, Anne will take nothing, and Jo and Julie will take instead. It s not to control Anne s ability to determine the disposition of the property once she is the fee owner. Is the TODD void? Is it effective as to Anne only? Anne s joinder is not equal to a TODD from Anne. Require a probate determination to issue a COT to Anne, unless Jo and Julie give a deed to Anne or Anne files a TODD to Jo and Julie.

4. 2. Fee: Everett and Anne, married, as Joint Tenants TODD signed by Anne is recorded, stating she is a widow, conveying the property to her son, Andrew. Later, a death certificate and Affidavit of Survivorship is recorded regarding Everett. Question: Since the Affidavit of Survivorship was recorded after the TODD does the TODD convey only her interest in the property or also the interest she acquired upon the death of Everett?

5. Answer Based on death ctf and affidavit, issue a new COT to Anne. Carry forward the TODD Do not carry forward the Death Certificate and Affidavit At the time Anne signed the TODD as widow, she was the sole owner since Everett was deceased. She merely documented that fact later.

6. 3. Fee owner: Everett and Anne, married, as joint tenants Anne, married, signs a TODD to son, dated 1/1/2017. (Spouse is not a grantor and does not consent.) TODD says on the death of Anne property goes to son. Everett dies 3/1/2017 Anne files death certificate and affidavit of survivorship 4/1/2017 Anne dies 6/1/2017

7. Anne and Everett, married, JT Anne, married, signs a TODD to son, dated 1/1/2017. (Spouse is not a grantor and does not consent.) TODD says on the death of Anne property goes to son. Does not includes This instrument conveys any and all interests acquired by the grantor before, on or after the date of this instrument. Everett dies 3/1/2017 Anne files death certificate and affidavit of survivorship 4/1/2017 Anne dies 6/1/2017 Answer: Need probate determination, spouse did not join in, after-acquired title issue. 507.071 Subd. 24 Form of TODD: I (grantor owner or owners and spouses, if any, with marital status designated) 507.071 Subd. 2 A transfer on death deed must comply with all provisions of MN law applicable to deeds including 507.02. 507.02 Conveyance of the homestead is void unless both spouses sign. Conveyance of non-homestead is valid but subject to the rights of non-signing spouse.

8. Anne and Everett, married, JT Is it the homestead? We don t know. If yes, TODD is void. If not the homestead, Everett s rights likely were extinguished upon his death, since they owned as joint tenants. If the after-acquired title statement is not included, what does Fred get? Subd. 21, a TODD does not include after acquired title unless the statement is included. Joint tenancy: Each owns the whole. When one dies, he is removed/disappears. So did Anne acquire anything after signing the TODD? Require a probate determination. There may be other children or devisee who could claim an interest arguing Anne did acquire something upon Everett s death.

9. 4. Anne and Everett, married, tenants in common Anne records a TODD to son, Everett does not join in Anne dies Should the deed have been accepted for recording? Maybe 507.071 Subd. 8 A transfer on death deed that otherwise satisfies all statutory requirements for recording may be recorded and shall be accepted for recording in the county in which the property described in the deed is located. But no CRV and no certification by county auditor. 507.02 Conveyance of the homestead is not valid unless both spouses sign (except purchase money mortgage.) 507.02 Non-homestead: A spouse may convey real estate she owns, subject to the rights of the other spouse. If homestead, the TODD likely isn t valid. If non-homestead, goes to son, subject to the rights of Everett as spouse. What are those rights? Need a probate court determination.

10. 5. Fee Owner: Charles, single TODD from Charles to Fred, his friend Charles and Fred are in a car accident Charles dies 1-1-2017 Fred dies 1-3-2017, 48 hours after Charles

11. Fee Owner: Charles, single TODD from Charles to Fred. They are friends, not relatives. Charles and Fred are in a car accident Charles dies 1-1-2017 Fred dies 1-3-2017, 48 hours after Charles Answer: TODD is void. Fred takes nothing unless he survives Charles by 120 hours. 507.071 Subd. 2 The TODD conveys the interest of the grantor upon the death of the grantor, but subject to survivorship provisions of section 524.2-702. 524.2-702 (a) A beneficiary who fails to survive by 120 hours the grantor owner upon whose death the conveyance to the beneficiary becomes effective is deemed to have predeceased the grant owner. 507.071 Subd. 12 If all beneficiaries fail to survive the grantor owner, the TODD is void.

12. 6. Fee Owner: Charles, single TODD from Charles to Fred, his 1st cousin Charles dies 1-1-2017 Fred dies 1-3-2017, 48 hours after

13. Fee Owner: Charles, single TODD from Charles to Fred, his 1st cousin Charles dies 1-1-2017 Fred dies 1-3-2017, 48 hours after Answer: The issue of Fred who survive Charles, take in place of Fred. My advice: Requires a probate court determination to issue a new Certificate of Title. 507.071 Subd. 11 Antilapse: (a) If a grantee beneficiary who is a grandparent or lineal descendant of a grandparent of the grantor owner fails to survive the grantor owner, the issue of the deceased grantee beneficiary who survive the grantor owner take in place of the deceased grantee beneficiary. Take equally is all of the same degree of kinship to the grantee beneficiary, or if they are of unequal degree, those of more remote degree take by right of representation.

14. Charles, TODD to Fred, 1stcousin (both die) Why you need a Probate Court determination Proof of relationship (1stcousins) Issue is not defined. Black s Law Dictionary Natural issue is a term to describe the children born of their parents and not adopted. US Legal .com Issue, in the context of probate law, refers to all lawful, lineal descendants of the ancestor. Descendants are those who are the issue of an individual, such as children, grandchildren, and their children, to the remotest degree. Descendants are those in a descending line of birth from an individual, rather than an ascending line, such as to the parents of the individual. Proof of who are the issue of Fred Proof of their degree of relationship to Fred Do not rely on a self-serving affidavit instead of a probate court determination. 507.071 Subd. 26

15. 7. Fee Owner: Windwood, LLC Windwood, LLC signs a TODD to Jeff Jones Reject the TODD for recording. Grantor/owner cannot die .

16. 8. Fee owner is John John records a TODD to Mary for Blackacre While John is alive, Mary signs and presents for recording a mortgage on Blackacre Reject it. 507.071 Subd. 22 Mary has no interest and cannot encumber the property. Nor can someone with a lien against Mary file the lien against the property.

17. 9. Fee Owner: John, single John records a TODD to Jerry John gets married to Mary John dies. Jerry files death certificate of John and Affidavit of Survivorship and Clearance Certificate Mary has an interest in the property (spousal interest) Affidavit of Survivorship doesn t require current marital status; UCB Form 50.2.3 Clearance certificate shows only predeceased spouse. Death certificate will show marital status Require a deed from Mary and new spouse, if any, before issuing a new COT to Jerry, OR a probate determination of the rights of Mary and Jerry

18. 10. TODD recorded and Grantor has died Clearance certificate contains a lien or is subject to a condition or restriction stated in the Clearance Certificate. If there are no other issues, you should issue a new COT to the grantee/beneficiary of the TODD, and carry forward the Clearance Certificate and state in the remarks subject to lien (or condition)

19. 11. Fee owner: John, single John records TODD acknowledged 1/1/2017 to Mary John later records a TODD acknowledged 1/1/2016 to Anne John dies 3/1/2017 A TODD is recorded from John to Barbara, acknowledged on 2/1/2017 Mary is the new fee owner. 507.071 Subd. 13: If owner records more than one TODD for the same interest, the TODD with the latest acknowledgement date that is recorded before the death of the owner is effective and others are void.

20. 12. Fee owners: A, B, and C as joint tenants A and spouse and B, single, sign and record a TODD to X A dies B dies C dies X takes nothing. The TODD is void because the last surviving JT did not sign the TODD; Subd. 6 If C dies, then A and B, X is the fee owner upon B s death. If A and B gave a quitclaim deed to X (not a TODD), X would have 2/3s and C would have 1/3 as tenants in common.

21. Conclusions No certification or approval by the Examiner shall be required prior to recording the TODD in the office of the registrar of titles. Subd. 8 This doesn t mean you can t seek examiner advice. The statute is silent on examiner approval for issuing a new COT on the death of the grantor. Affidavit of Survivorship, death certificate and clearance certificate may be recorded separately or combined and shall be prima facie evidence of the facts stated in each, and the registrar of titles may rely on the statements to transfer title to the property described in the clearance certificate. Get Examiner advice before cancelling COT when the TODD grantor dies.