Transfer on death deed law modified

A transfer on death deed can avoid probate on the real estate transferred when someone passes away.

Effective April 27, 2024, a new law updates and clarifies the transfer on death deed law and creates a requirement that insurers provide 30 days of coverage for properties with a transfer on death deed if they have been notified that the deed exists to allow the beneficiary to obtain insurance.

Some of the changes include:

• clarifying there is no effect on the title when a transfer on death deed is executed before the death of the owner, except that there is an insurable interest in favor of the designee;

• specifying what happens if a joint tenant is the designee and dies before the owner/grantor;

• allowing transfer on death deeds to be valid or revoked when the deed or revocation was recorded incorrectly or incompletely for registered properties;

• clarifying what happens when there are competing transfer on death deeds that describe some of the same property;

• clarifying jurisdiction for cases related to transfer on death deeds is with the probate court, including medical assistance liens or the death of a beneficiary; and

• clarifying that a descendant of the beneficiary only takes the place of a deceased beneficiary when there is not a successor beneficiary named in the transfer on death deed, and provides when a court order following probate law must be used when a beneficiary cannot take the property.

Property insurance for grantee beneficiaries of transfer on death deeds

The new law specifies that when an insurance company is notified of a transfer on death deed executed for a property, it must allow for extended coverage for the transfer after the death of the homeowner and must cover the beneficiary until they obtain insurance or 30 days, whichever comes earlier.

A beneficiary does not have any right to the insurance unless the homeowner has died, and a new warning must be included in transfer on death deeds after Aug. 1, 2024, informing the beneficiary of issues related to the insurance of the property.

Rep. Sandra Feist (DFL-New Brighton) and Sen. Warren Limmer (R-Maple Grove) are the sponsors.

HF3925*/SF3846/CH91

HF3925* / SF3846 / CH91