North Dakota Transfer on Death Deeds – Avoiding Probate in North Dakota.
North Dakota Transfer on Death Deeds –
Avoiding Probate in North Dakota
In 2011, the North Dakota legislature enacted its version of the Uniform Real Property Transfer on Death Act (hereinafter, the “North Dakota Transfer on Death Deed Act”) – authorizing the execution of Transfer on Death Deeds (“TODDs”) with respect to North Dakota real property – including mineral rights – which can aid in avoiding probate in North Dakota.
North Dakota TODDs are used to avoid probate with respect to the North Dakota real property interests identified in the Transfer on Death Deed.
For information on ancillary probate in North Dakota, see also http://www.dahlelawnorthdakota.com/north-dakota-probate/ancillary-probate/
While North Dakota may have been the first state to adopt the Uniform Real Property Transfer on Death Act, at least 12 other states have subsequently adopted some form of the Uniform Real Property Transfer on Death Act – including Texas, which like North Dakota – has considerable mineral assets.
While Minnesota has not adopted the Uniform Real Property Transfer on Death Act, it has had its own unique Transfer on Death Deed legislation since 2008.
North Dakota Transfer on Death Deeds (“TODDs”) – Application
N.D.C.C. 30.1-32.1-14 identifies that the North Dakota TODD Act applies to a transfer on death deed made before, on, or after August 1, 2011, by a transferor dying on or after August 1, 2011.
Therefore, in the event that a North Dakota TODD was executed prior to August 1, 2011 – which was the effective date of the North Dakota TODD Act, it should be effective for its intended purposes, providing that:
- it was recorded prior to the death of the transferor, and
- the transferor died after August 1, 2011.
Minnesota – North Dakota Transfer on Death Deed (“TODD”) Differences
The differences between:
- the North Dakota Transfer on Death Deed Act, and
- Minnesota’s unique Transfer on Death Deed legislation,
are considerable – although the general intent of each body of law is similar.
Transfer on Death Deed Legislation
12 other states besides Minnesota had already adopted TODD legislation prior to the drafting of the Uniform Real Property Transfer on Death Act.
The drafters of the original Uniform Real Property Transfer on Death Act saw a need for a uniform body of law addressing Transfer on Death Deed real property issues.
However, North Dakota adopted a somewhat modified version of the Uniform Real Property Transfer on Death Act.
Therefore, the North Dakota Transfer on Death Deed Act may be different than comparable legislation adopted in other states.
In some states, the adoption of all or parts of the Uniform Real Property Transfer on Death Act may have been an improvement on their previous legislation.
However, in other states – such as in Minnesota – unique Transfer on Death Deed legislation may be superior to the original Uniform Real Property Transfer on Death Act – and the variations thereof which may appear in several of the states.
Minnesota – North Dakota TODDS – Depth of Material
The North Dakota Transfer on Death Deed Act contains 14 statutory sections, whereas Minnesota’s Transfer on Death Deed legislation covers 26 statutory sections.
Minnesota’s Transfer on Death Deed legislation is significantly more comprehensive than the North Dakota Transfer on Death Deed Act.
Therefore, the North Dakota Transfer on Death Deed Act may provide less guidance on a number of issues than Minnesota’s unique Transfer on Death Deed legislation.
Minnesota – North Dakota Transfer on Death Deeds – Legislative and Judicial Review
Since Minnesota’s Transfer on Death Deed legislation has been in effect for three years longer than the North Dakota Transfer on Death Deed Act, the Minnesota legislature has had more opportunities to address ongoing issues with its unique TODD legislation than has North Dakota’s legislature.
However, reported judicial decisions in either state reviewing Transfer on Death Deed issues is still lacking.
As of October 1, 2016, there have been no reported judicial decisions interpreting either body of law.
Estate Planning – Minnesota – North Dakota TODDS
The use of Minnesota’s TODD is a popular estate planning technique in order to avoid the necessity the probate proceeding upon the death of the grantor.
Once it becomes better known, the North Dakota TODD Act may likewise become a well-used tool to avoid probate with respect to certain North Dakota real property titles.
North Dakota TODDS – Effect During the Transferor’s Life
N.D.C.C. 30.1-32.1-09 identifies that during the lifetime of the transferor, a North Dakota transfer on death deed does not:
- Affect an interest or right of the transferor or any other owner,
including the right to transfer or encumber the property;
- Affect an interest or right of a transferee,
even if the transferee has actual or constructive notice of the deed;
- Affect an interest or right of a secured or unsecured creditor or future creditor of the transferor, even if the creditor has actual or constructive notice of the deed;
- Affect the transferor’s or designated beneficiary’s eligibility for any form of public assistance;
- Create a legal or equitable interest in favor of the designated beneficiary; or
- Subject the property to claims or process of a creditor of the designated beneficiary.\
Nevertheless, a North Dakota Transfer on Death Deed can aid in avoiding probate in North Dakota upon the death of the owner.
Conclusion
Owners of North Dakota real property interests – including mineral rights – who are contemplating transferring such interests pursuant to a North Dakota TODD which can aid in avoiding probate in North Dakota, are invited to contact Minnesota and North Dakota attorney Gary C. Dahle for assistance.
Attorneys not licensed in Minnesota or North Dakota are invited to refer possible Minnesota or North Dakota TODD issues to Minnesota and North Dakota attorney Gary C. Dahle, at 763-780-8390, or [email protected].
Copyright 2016 – All Rights Reserved
Gary C. Dahle – Attorney at Law
2704 Mounds View Blvd.
Mounds View, MN 55112
Phone: 763-780-8390 Fax: 763-780-1735 [email protected]
Legal Disclaimer
Information provided herein is only for general informational and educational purposes. North Dakota’s version of the Uniform Real Property Transfer on Death Act involves many complex legal issues. If you have a specific legal problem about which you are seeking advice, consult with a North Dakota attorney of your choice. Gary C. Dahle, Attorney at Law, is licensed to practice law only in the State of North Dakota, and in the State of Minnesota, in the United States of America. Therefore, only those persons interested in matters governed by the laws of the State of North Dakota and Minnesota should consult with, or provide information to, Gary C. Dahle, Attorney at Law, or take note of information provided herein.
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