The execution of estate planning documents at a dying person’s bedside is not a palatable task for anyone involved. As estate planning attorneys, we advise our clients against this particular scenario. Inevitably, clients do not always follow our advice. If you find yourself in this situation and the execution of deeds is part of your dying client’s estate plan, something to keep in mind is that, pursuant to Minn. Stat. §507.071, subd. 8, a Transfer on Death Deed (“TODD”) must be recorded prior to the death of the grantor-owner in order to be effective. Imagine the following situation: your client executes a TODD and then immediately dies. Since your client’s death has preceded the recording of the deed, the TODD has no effect and the property must be probated. If one of your client’s goals was to avoid probate, that goal has been frustrated. On the other hand, a Quit Claim Deed or Life Estate Deed is effective when the deed is delivered (while the grantor is alive), meaning surrender of control by the grantor and intent to convey title. See generally, In re Estate of Savich, 671 N.W.2d 746 (Minn. App. 2003). Therefore, if your client’s wish is to avoid probate, rather than using a TODD, instead have your client execute a Quit Claim Deed or a Life Estate Deed, keeping in mind the tax consequences of each, and make sure to meet the delivery requirement.
Letty M-S Van Ert
Tuft, Lach PLLC