Law Outside the Box

If all beneficiaries designated in the Transfer on Death Deed (TODD) die before you, no transfer shall occur and the TODD is void.  It is important to note this because I have prepared a number of TODDs for clients where they have named a single beneficiary such as an only child and not taken into account if that child predeceases the client, then the TODD becomes void.  Of course there are solutions around this dilemma. 

To maximize the effectiveness of the TODD, it is recommended that you monitor the situation periodically to ensure that the TODD is still valid for the purposes you have intended.  This may include having back-up beneficiary designations as well as other more traditional methods like using a trust to ensure that your wishes are carried out as you intended.

For more information, see Minn. Stat. § 507.071.

No and no.  You do not need to notify your beneficiary that they have been named a beneficiary in your TODD.  You do not need to obtain their consent either.  In fact, under the law, you don’t have to disclose to anyone who the beneficiary is.  The beneficiary may not end up having any knowledge whatsoever until after you pass away. 

However with that said, I believe it would be prudent in many cases to notify the beneficiary while you are preparing the TODD just so that the beneficiary is in the loop.  That way, if necessary, the beneficiary can prepare to accommodate receiving any real estate to be designated to them.

For more information, see Minn. Stat. § 507.071.

Yes.  As the owner of the real estate, you still can sell or transfer the real estate whenever you like.  This is true even with the existence of a TODD on your real estate.  You don’t need approval of the person who you were going to designate the real estate to under the TODD.  You don’t have to file anything with the County to notify them that the TODD is no longer effective.  It will self-cancel by the fact that you don’t have the real estate in your ownership at the time of your death.

For example, let’s assume your mother Doris has a TODD prepared and filed today designating her home to you.  A year from now, your mother Doris decides to sell her home and move into a nursing home.  She does not need to obtain your approval to sell her home.  She does not need to notify the County that she is selling her home as it relates to the TODD on file (although she could notify the County as a courtesy).  With a Transfer on Death Deed, you have complete flexibility to maintain 100% control over your real estate until you die.

For more information, see Minn. Stat. § 507.071.

In August 2008, Minnesota enacted a law that allows people to transfer the ownership of their real estate through the use of a beneficiary designation.  The objective is to enable that piece of real estate to avoid going through probate.  For those of you who have experienced the loss of a loved one and traversed through the process of probate, in many situations, probate can be expensive and time-consuming. 

More often than not, the reason behind the lengthy process of probate relates to real estate owned by the decedent.  For the majority of people, the most significant asset in their estate is the home they own.  A Transfer on Death Deed (TODD) is quickly becoming the estate planning tool of choice to transfer real estate.

In the next several posts, I will answer questions regarding various aspects of Transfer on Death Deeds (TODDs). 

For more information, see Minn. Stat. § 507.071.