A bill for an act
relating to real property; providing for property insurance for grantee beneficiaries
of transfer on death deeds; making technical, clarifying, and conforming changes
to transfer on death deeds; amending Minnesota Statutes 2022, section 507.071;
proposing coding for new law in Minnesota Statutes, chapter 507.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Minnesota Statutes 2022, section 507.071, is amended to read:
For the purposes of this section the following terms have
the meanings given:
(a) "Beneficiary" or "grantee beneficiary" means a person or entity named as a grantee
beneficiary in a transfer on death deed, including a successor grantee beneficiary.
(b) "County agency" means the county department or office designated to recover medical
assistance benefits from the estates of decedents.
(c) "Grantor owner" means an owner, whether individually, as a joint tenant, or as a
tenant in common, named as a grantor in a transfer on death deed upon whose death the
conveyance or transfer of the described real property is conditioned. Grantor owner does
not include a spouse who joins in a transfer on death deed solely for the purpose of conveying
or releasing statutory or other marital interests in the real property to be conveyed or
transferred by the transfer on death deed.
(d) "Owner" means a person having an ownership or other interest in all or part of the
real property to be conveyed or transferred by a transfer on death deed either at the time the
deed is executed or at the time the transfer becomes effective. Owner does not include a
spouse who joins in a transfer on death deed solely for the purpose of conveying or releasing
statutory or other marital interests in the real property to be conveyed or transferred by the
transfer on death deed.
(e) "Property" and "interest in real property" mean any interest in real property located
in this state which is transferable on the death of the owner and includes, without limitation,
an interest in real property defined in chapter 500, a mortgage, a deed of trust, a security
interest in, or a security pledge of, an interest in real property, including the rights to
payments of the indebtedness secured by the security instrument, a judgment, a tax lien,
both the seller's and purchaser's interest in a contract for deed, land contract, purchase
agreement, or earnest money contract for the sale and purchase of real property, including
the rights to payments under such contracts, or any other lien on, or interest in, real property.
(f) "Recorded" means recorded in the office of the county recorder or registrar of titles,
as appropriate for the real property described in the instrument to be recorded.
(g) "State agency" means the Department of Human Services or any successor agency.
(h) "Transfer on death deed" means a deed authorized under this section.
A deed that conveys or assigns an interest
in real property, to a grantee beneficiary and that expressly states that the deed is only
effective on the death of one or more of the grantor owners, transfers the interest to the
grantee beneficiary upon the death of the grantor owner upon whose death the conveyance
or transfer is stated to be effective, but subject to the survivorship provisions and requirements
of section 524.2-702. new text begin Until a transfer on death deed becomes effective, it has no effect on
title to the real property described in the deed, but it does create an insurable interest in the
real property in favor of the designated grantee beneficiary or beneficiaries for purposes of
insuring the real property against loss or damage that occurs on or after the transfer on death
deed becomes effective. new text end A transfer on death deed must comply with all provisions of
Minnesota law applicable to deeds of real property including, but not limited to, the
provisions of sections 507.02, 507.24, 507.34, 508.48, and 508A.48. If a spouse who is
neither a grantor owner nor an owner joins in the execution of, or consents in writing to,
the transfer on death deed, such joinder or consent shall be conclusive proof that upon the
transfer becoming effective, the spouse no longer has or can claim any statutory interest or
other marital interest in the interest in real property transferred by the transfer on death deed.
However, such transfer shall remain an interest as identified in section 256B.15 for purposes
of complying with and satisfying any claim or lien as authorized by subdivision 3.
The interest transferred to a beneficiary under a
transfer on death deed after the death of a grantor owner is transferred subject to all effective
conveyances, assignments, contracts, mortgages, deeds of trust, liens, security pledges,
judgments, tax liens, and any other matters or encumbrances to which the interest was
subject on the date of death of the grantor owner, upon whose death the transfer becomes
effective including, but not limited to, any claim by a surviving spouse who did not join in
the execution of, or consent in writing to, the transfer on death deed, and any claim or lien
by the state or county agency authorized by sections 246.53, 256B.15, 256D.16, 261.04,
and 514.981, if other assets of the deceased grantor's estate are insufficient to pay the amount
of any such claim. A beneficiary to whom the interest is transferred after the death of a
grantor owner shall be liable to account to the state or county agency with a claim or lien
authorized by section 246.53, 256B.15, 256D.16, 261.04, or 514.981, to the extent necessary
to discharge any such claim remaining unpaid after application of the assets of the deceased
grantor owner's estate, but such liability shall be limited to the value of the interest transferred
to the beneficiary. To establish compliance with this subdivision and subdivision 23, the
beneficiary must record a clearance certificate issued in accordance with subdivision 23 in
each county in which the real property described in the transfer on death deed is located.
A transfer on death deed may designate multiple
grantee beneficiaries to take title as joint tenants, as tenants in common or in any other form
of ownership or tenancy that is valid under the laws of this state.new text begin If a grantee joint tenant
dies before the grantor owner upon whose death the transfer occurs and no successor
beneficiary for the deceased grantee is designated in the transfer on death deed, the surviving
joint tenants are the successors and no interest lapses.
new text end
A transfer on death deed may designate one
or more successor grantee beneficiaries or a class of successor grantee beneficiaries, or
both. If the transfer on death deed designates successor grantee beneficiaries or a class of
successor grantee beneficiaries, the deed shall state the condition under which the interest
of the successor grantee beneficiaries would vest.
If an interest in real property is owned as joint
tenants, a transfer on death deed executed by all of the owners and, if required by section
507.02, their respective spouses, if any, that conveys an interest in real property to one or
more grantee beneficiaries transfers the interest to the grantee beneficiary or beneficiaries
effective only after the death of the last surviving grantor owner. If the last surviving joint
tenant owner did not execute the transfer on death deed, the deed is ineffective to transfer
any interest and the deed is void. An estate in joint tenancy is not severed or affected by the
subsequent execution of a transfer on death deed and the right of a surviving joint tenant
owner who did not execute the transfer on death deed shall prevail over a grantee beneficiary
named in a transfer on death deed unless the deed specifically states that it severs the joint
tenancy ownership.
A transfer on death deed may be executed by
a duly appointed attorney-in-fact pursuant to a power of attorney which grants the
attorney-in-fact the authority to execute deeds.
A transfer on death deed is valid
if the deed is recorded in a county in which at least a part of the real property described in
the deed is located and is recorded before the death of the grantor owner upon whose death
the conveyance or transfer is effective. new text begin Notwithstanding the definition of recorded under
subdivision 1, if the real property is registered property, a transfer on death deed that was
recorded incorrectly or incompletely is valid if the deed was recorded before the death of
the grantor owner in the office of the county recorder or the registrar of titles in a county
in which at least part of the real property is located, and is memorialized on the certificate
of title after death. new text end A transfer on death deed is not effective for purposes