North Dakota Transfer on Death Deeds Defined.

North Dakota Transfer on Death Deeds Defined

North Dakota Transfer on Death Deeds Defined

North Dakota Transfer on Death Deeds Defined

N.D.C.C. 30.1-32.1-01 defines the termtransfer on death deed” as:

a deed authorized under this chapter.

North Dakota Transfer on Death Deeds Defined – Authority

Pursuant to N.D.C.C. 30.1-32.1-02, an individual may:

  • transfer property,
  • to one or more beneficiaries,
  • effective at the transferor’s death,
  • by a transfer on death deed.

The above definition contemplates five separate requirements for an effective North Dakota transfer on death deed:

  1. an individual transferor having the proper legal capacity;
  1. North Dakota real property;
  1. one or more qualified beneficiaries;
  1. a qualifying North Dakota transfer on death deed document; and
  1. a transfer of North Dakota real property taking effect at the death of the individual transferor.

North Dakota Transfer on Death Deeds Defined – Transferor

Under N.D.C.C. 30.1-32.1-01, the termtransferor is defined to mean:

  • an individual,
  • who makes a North Dakota transfer on death deed.

North Dakota Transfer on Death Deeds Defined – Legal Capacity

N.D.C.C. 30.1-32.1-05 identifies the legal capacity which is required of a transferor in order to execute a North Dakota transfer on death deed, by providing as follows:

The capacity required to make or revoke a transfer on death deed

is the same as the capacity required to make a will.

North Dakota Transfer on Death Deeds Defined – Document Requirements

N.D.C.C. 30.1-32.1-06 identifies the content and formality requirements for an effective North Dakota transfer on death deed, by providing in part as follows:

A transfer on death deed must contain the essential elements and formalities of a properly recordable inter vivos deed.

A transfer on death deed must state that the transfer to the designated beneficiary is to occur at the transferor’s death.

North Dakota Transfer on Death Deeds Defined – Individual Transferors

The term individual is not defined in either:

  • North Dakota‘s version of the Uniform Real Property Transfer on Death Act, or
  • the Uniform Real Property Transfer on Death Act

However, Black’s Law Dictionary identifies that the term individual refers to one person, thing, or entity.

Likewise, Webster’s Dictionary identifies that the term individual refers to a single person.

While it does not have the same legal authority as the statute – the Uniform Real Property Transfer on Death Act official commentary corresponding to N.D.C.C. 30.1-32.1-01 defines the term individual negatively, by declaring that the term individual does not include a:

  • business entity,
  • estate, or
  • trust.

In addition, while the corresponding official commentary identifies that:

  • an agent, or
  • other fiduciary representative,

cannot be an individual transferor, the official commentary does identify that:

  • a duly authorized agent, or other fiduciary representative,
  • can execute a North Dakota transfer on death deed,
  • on behalf of a principal or ward,

in which case the principal or ward would be the transferor.

North Dakota Transfer on Death Deeds Defined – Joint Tenants

The Uniform Real Property Transfer on Death Act official commentary corresponding to N.D.C.C. 30.1-32.1-02 declares that the term individual:

  • is not limited to a singular person, but also
  • includes a multiple number of persons.

Such official commentary provides an example, which identifies that:

  • more than one person – including spouses who own real property as joint tenants,
  • can execute a transfer on death deed.

Pursuant to N.D.C.C. 30.1-32.1-10(3), any surviving joint tenant will have ownership priority over any surviving beneficiary identified in a North Dakota transfer on death deed.

North Dakota Transfer on Death Deeds Defined – Owner

The term “owneris not defined by North Dakota‘s version of the Uniform Real Property Transfer on Death Act – although to a certain extent, its meaning can be inferred from the statutory definition of a “joint owner“.

North Dakota Transfer on Death Deeds Defined – Joint Owner

Under N.D.C.C. 30.1-32.1-01, the term “joint owner” is defined to mean:

  • an individual,
  • who owns property concurrently with one or more other individuals,
  • with a right of survivorship.

N.D.C.C. 30.1-32.1-01 identifies that the term “joint ownerincludes:

  • a joint tenant, and
  • tenant by the entirety – describing a form of ownership in land restricted to married persons.

Both the joint tenancy and the tenancy by the entirety forms of ownership recognize all co-owners as a unified whole.

However,

  • since N.D.C.C. 47-02-05 identifies that North Dakota does not otherwise recognize tenancy by the entirety,
  • the term “joint owner” must be limited under N.D.C.C. 30.1-32.1-01 to a joint tenant – and not a tenant by the entirety.

North Dakota – Joint Tenancy Interest

N.D.C.C. 47-02-06 defines the term joint tenancy interest – or joint interest – in the following manner:

A joint interest is one owned by several persons in equal shares

by a title created by a single will or transfer,

  • when expressly declared in the will or transfer to be a joint tenancy, or

  • when granted or devised to executors or trustees as joint tenants.

At common law, each joint tenant:

  • owns an undivided interest in the whole estate – not merely a fractional interest in the estate, and
  • is a member of a group which collectively owns the entire estate.

Unlike a tenant in common, a joint tenant has a right of survivorship.

Therefore, when one joint tenant dies:

  • the remaining joint tenant(s) retain ownership of the entire estate,
  • the former joint tenancy interest of the deceased co-tenant is extinguished, and
  • nothing passes by reason of death to the heirs or devisees of the deceased joint tenant.

North Dakota – Tenant in Common

N.D.C.C. 30.1-32.1-01 identifies that the term “joint owner” specifically excludes a tenant in common.

N.D.C.C. 47-02-08 defines the term interest in common – which is perhaps equivalent to a tenant in common – in the following manner:

An interest in common is one owned by several persons

not in joint ownership or partnership.

Every interest created in favor of several persons in their own right is an interest in common, unless acquired by them in partnership for partnership purposes, or unless declared in its creation to be a joint tenancy.

Unlike a joint tenant, each tenant in common has:

  • a distinct undivided, separate interest in the property,
  • with no right of survivorship.

Upon the death of a tenant in common, such co-tenant’s separate interest in the property will either:

  • pass by succession to that co-tenant’s heirs under the laws of intestate succession, or
  • devolve to that co-tenant’s Will devisees.

North Dakota Transfer on Death Deeds Defined – Property

Under N.D.C.C. 30.1-32.1-01, the termproperty” is defined to mean:

  • an interest in North Dakota real property,
  • which is transferable upon the death of the owner.

The Uniform Real Property Transfer on Death Act official commentary corresponding to N.D.C.C. 30.1-32.1-02 identifies that a transferor will be able to specify in the transfer on death deed:

  1. the nature and extent of the property rights transferred – whether:
  • surface rights,
  • mineral rights, or
  • both surface rights, and mineral rights,

and

  1. the property rights reserved – if any – whether:
  • surface rights, or
  • mineral rights.

North Dakota Mineral rights constitute real property interests, as do surface rights.

Therefore, the property which may be transferred by a North Dakota transfer on death deed can be limited to either:

  • surface rights, or
  • mineral rights.

North Dakota Transfer on Death Deeds Defined – Beneficiary

Under N.D.C.C. 30.1-32.1-01, the termbeneficiary” is defined to mean:

  • a person,
  • that actually receives property,
  • under a North Dakota transfer on death deed.

However, the complete version of the Uniform Real Property Transfer on Death Act provides a definition for the term person – which:

  • definition is not included in North Dakota’s version of the Uniform Real Property Transfer on Death Act, and
  • identifies estates, trusts, and various government and business entities as persons.

The corresponding Uniform Real Property Transfer on Death Act official commentary associates the definition of the term person, with the definition of the term beneficiary, since the complete version of the Uniform Real Property Transfer on Death Act provides a definition for the term person.

Therefore, the Uniform Real Property Transfer on Death Act official commentary identifies that a beneficiary can be any personincluding a trustee of a revocable trust.

It could be argued that by excluding estates, trusts, and various government and business entities from the definition of a person, North Dakota intended to exclude estates, trusts, and various government and business entities from the term beneficiary.

By failing to provide a definition for the term person, North Dakota’s version of the Uniform Real Property Transfer on Death Act creates some uncertainty as to whether a beneficiary can be anyone other than an individual person.

Therefore, estates, trusts, and various government and business entities may not be permitted to be beneficiaries under a North Dakota transfer on death deed.

North Dakota Transfer on Death Deeds Defined – Designated Beneficiary

Under N.D.C.C. 30.1-32.1-01, the termdesignated beneficiary” is defined to mean:

  • a person,
  • designated to receive property,
  • in a North Dakota transfer on death deed.

However, the complete version of the Uniform Real Property Transfer on Death Act provides a definition for the term person, and associates that definition with the definition for the term designated beneficiary.

Therefore, the corresponding Uniform Real Property Transfer on Death Act official commentary identifies that a designated beneficiary can be any person – including a trustee of a revocable trust.

The definition of a designated beneficiary contemplates a person who:

  • is intended to receive property, and
  • is designated to receive such property,

upon the death of the transferor pursuant to a North Dakota transfer on death deed – which remains revocable until death – rather than the person(s) who actually receive the property.

North Dakota Primary and Contingent Designated Beneficiaries

The Uniform Real Property Transfer on Death Act official commentary corresponding to N.D.C.C. 30.1-32.1-02 identifies that the transferor will be able to designate in a transfer on death deed one or more primary beneficiaries who will have rights to the transferor‘s property if such beneficiary or beneficiaries survive the transferor.

Such official commentary corresponding to N.D.C.C. 30.1-32.1-02 also provides that one or more contingent beneficiaries will have rights to the transferor‘s property if:

  • such beneficiary or beneficiaries survive the transferor,
  • but one or more of the primary beneficiaries do not.

North Dakota Transfer on Death Deeds Defined – Recording Requirements

N.D.C.C. 30.1-32.1-06 identifies the recording requirements for an effective North Dakota transfer on death deed, by providing in part as follows:

A transfer on death deed must be recorded

  • before the transferor’s death
  • in the public records
  • in the office of the county recorder of the county where the property is located.

Therefore, if a North Dakota transfer on death deed is not recorded properly before the death of the transferor, it will not be effective to transfer title to the designated beneficiary upon the death of the transferor.

For information on ancillary probate in North Dakota, see http://www.dahlelawnorthdakota.com/north-dakota-probate/ancillary-probate/

Conclusion

North Dakota Transfer on Death Deeds Defined

Owners of North Dakota real property interests – including mineral rights – who are contemplating transferring such interests pursuant to a North Dakota Transfer on Death Deed 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 Transfer on Death Deed issues to Minnesota and North Dakota attorney Gary C. Dahle, at 763-780-8390, or gary@dahlelaw.com.

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Copyright 2017

Gary C. Dahle – Attorney at Law

2704 County Road 10

Mounds View, MN 55112

Phone:  763-780-8390   Fax:     763-780-1735      gary@dahlelaw.com

 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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