A new Minnesota law makes it easier and cheaper for Minnesotans to plan for the transfer of real property upon their death. The transfer on death deed (or TODD) legislation that went into effect last month allows a person to sign and record a deed transferring real estate directly to a named beneficiary when the person dies, thereby avoiding probate on the property. The transfer proceeds much the same way as financial accounts that have a “pay on death” designation.
Under the new law, the transfer on death deed must be recorded prior to the grantor’s death.
The grantor retains full ownership rights over the property while living, including the right to revoke the deed or sell the property.
In addition, a TODD may direct the transfer of real estate to one or more named beneficiaries, to a class of beneficiaries or to the trustee of a trust, and because the beneficiary has no ownership interest until the grantor’s death, the property is protected from potential claims by the beneficiary’s creditors.
According to real estate practitioners, the TODD is especially useful for small estates, where it will avoid probate when the only asset might be one particular piece of property, like a homestead.
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Avoiding probate made easier under new law
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