New Law Protects Homeowners with Transfer on Death Deeds
You might have heard about changes in Minnesota law regarding Transfer on Death Deeds that take effect on August 1, 2024. If you haven’t heard, you should know about them.
First, what's a Transfer on Death Deed? This is a legal document that identifies who should own real estate after the owner dies. This can be a very useful way to avoid probate. But, until recently, there was a problem.
Previously, when the owner of the property died, the deed transferred to the designated beneficiary, but the homeowner’s insurance stopped at the death of the original owner. Unless the beneficiary acted promptly to get new insurance on the home, there was a risk. In fact, some beneficiaries have suffered a total loss on the home before they could get insurance.
Second, what’s changed in Minnesota law? Now, Minnesota law REQUIRES existing homeowner’s insurance to continue to the beneficiary owner for 30 days. This makes it easier to ensure you have new insurance in place without a gap in coverage. Details at Minn. Stat. subchapter 507.072, Subd. 3. Minnesota Statute
Third, what should you do?
- Notify Your Insurance Company: Write to your insurance company about your TODD, including the names and contact information of all beneficiaries. Ask for confirmation that they received this information.
- Inform New Insurance Carriers: If you change insurance companies, tell the new company about your TODD in the same way and ask for confirmation.
- Advise Beneficiaries: Tell your beneficiaries to get their own insurance as soon as possible after your death. The 30 days can pass quickly, and vacant homes can face more risks without someone living in them.
If thinking about a Transfer on Death Deed has you wondering about you estate plans in general, and how they relate to your overall financial goals, it might be smart to talk with an experienced, highly-trained, CERTIFIED FINANCIAL PLANNER™ professional and Behavioral Financial Advisor in West Saint Paul, Minnesota to help better understand your options. I love to meet new people. I also know several extremely capable estate planners, who could help you if needed. So, follow this LINK to find a time for us to have a get-acquainted visit.
I am a financial planner who is an advocate for my clients ALL THE TIME – a fiduciary financial planner. I provide guidance based on clients’ best interests, not commissions or sales quotas. I think it’s the best way to serve clients and I am thrilled to work this way all the time.
And yes, I’m still taking on a few great families to be part of my financial planning practice in West Saint Paul, Minnesota and, thanks to Zoom, across the country.
Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.