Transfer on death deed
A transfer on death deed conveys Minnesota real property to a named beneficiary automatically on the owner's death, without probate.
It is the cheapest and most underused estate planning tool available to a Minnesota homeowner, and it fails completely if one step is missed.
It must be recorded before death#
Under Minn. Stat. 507.071, the deed must be executed, acknowledged and recorded before the grantor owner dies.
Not signed and held. Not left with a lawyer. Not placed in a safe deposit box. Recorded, with the county recorder or the registrar of titles.
A transfer on death deed found in a drawer after the death is not a transfer on death deed. It is a piece of paper, and the property goes through probate.
This is the same trap that catches ordinary deeds signed and held back — delivery matters, and the statute solves it by requiring recording.
The owner keeps everything during life#
The deed conveys nothing until death.
The owner may sell the property, mortgage it, or revoke the deed. The beneficiary has no present interest, no right to occupy, and no ability to interfere. Their creditors cannot reach it.
That is what makes it superior to the common alternative of adding a child to the deed as a joint tenant — which transfers a present interest immediately, exposes the property to the child's creditors and divorce, may trigger the due-on-sale clause, and forfeits the step-up in basis the child would get by inheriting.
A will does not override it#
Under subdivision 19, a transfer on death deed executed, acknowledged and recorded in accordance with the statute is not revoked by the provisions of a will.
Someone who records a TODD and later writes a will leaving the house to someone else has not changed anything about the house. Revoking requires a separate instrument, recorded during life.
What the beneficiary does afterward#
Three documents, recorded in each county where the property is located.
An affidavit of identity and survivorship, which must include the name and mailing address of the person to whom future property tax statements should be sent.
A certified copy of the record of death.
A clearance certificate from the county agency, addressing medical assistance claims and liens. The beneficiary applies for it, and the application must include the legal description of each parcel covered.
They may be recorded as one combined document or separately. The transfer is not complete until all three are filed.
The medical assistance point#
The clearance certificate exists because a transfer on death deed does not extinguish medical assistance claims.
Where the county determines a claim or lien exists, statutory collection provisions apply, and a probate court may need to authorise a sale of property subject to such a lien.
For families where the decedent received long-term care assistance, that is a real issue and one to take advice on rather than discover at the recorder's office.