What is a Transfer on Death Deed; How Does it Skip Probate?
Picture this: your dad passes away, leaving behind the family farmhouse. Everyone agrees it should go to you and your brother. Then you learn that before either of you can sell it, insure it, or even put it in your names, the house has to go through probate. That means court filings, attorney fees, and months of waiting during an already hard time. With a little planning, it doesn’t have to be that way. A transfer on death deed (TODD) lets property owners in North Dakota and Minnesota pass real estate directly to the people they choose, without probate. Here’s how it works in each state. A Transfer on Death Deed or a TODD allows the transfer of title of real property or mineral rights to a beneficiary who will inherit the property automatically upon their death, completely bypassing the probate court process.
How a TODD works in North Dakota
North Dakota’s TODD rules come from the Uniform Real Property Transfer on Death Act, N.D.C.C. ch. 30.1-32.1.
You keep full control during your life
While you’re alive, the deed gives your beneficiary no rights, ownership, or claim to the property. You can freely sell, mortgage, lease, or give away the property, just as you could before.
You don’t have to notify your beneficiary or get their permission. The deed doesn’t need to be delivered to or accepted by the beneficiary, and no payment is required (§ 30.1-32.1-07). The mental capacity needed to make or revoke a TODD is the same as for a will (§ 30.1-32.1-05).
Changing or revoking your TODD
You can change or revoke a TODD at any time before your death, but only with a recorded document (§ 30.1-32.1-08). You can:
- Record a new TODD that revokes the earlier one, either expressly or by being inconsistent with it
- Record an instrument of revocation that expressly revokes the TODD
- Record a regular deed that expressly revokes the TODD
The revocation must be signed and acknowledged, then recorded before your death in the county where the original TODD was recorded.
Two things will not revoke a TODD: tearing up or marking your copy, and your will. A will cannot revoke or override a recorded TODD.
Automatic transfer at death
The beauty of a TODD is that the transfer happens automatically. When you pass away, the property transfers to your surviving beneficiaries without probate. To clear title, the beneficiary records a certified copy of your death certificate with the county recorder and meets any local recording requirements.
A beneficiary must survive you to inherit. If a beneficiary dies before you, their share lapses unless North Dakota’s anti-lapse rules apply.
Key requirements
Under § 30.1-32.1-06, a North Dakota TODD must:
- Meet the requirements of any recordable deed, including being signed and acknowledged before a notary
- State that the transfer to the beneficiary occurs at your death
- Use the phrase “transfer on death deed” or the abbreviation “TOD” in its title
- Be recorded with the county recorder in the county where the property is located before your death
A TODD that isn’t recorded before your death has no effect.
Multiple beneficiaries
You can name more than one beneficiary. Surviving beneficiaries receive equal, undivided shares with no right of survivorship, meaning they own the property as tenants in common. If one beneficiary dies before you, that share passes to the remaining beneficiaries in proportion to their interests.
Co-owned property
If you own the property in joint tenancy and another joint owner survives you, the property goes to that surviving owner and your TODD has no effect. A TODD signed by one joint owner takes effect only if that owner is the last surviving joint tenant. If you own the property as a tenant in common, your TODD transfers only your share.
Mortgages, liens, and creditors
The beneficiary takes the property subject to any existing mortgages, liens, and other encumbrances. The TODD also transfers the property without any warranty of title. If your probate estate can’t cover allowed creditor claims or statutory allowances to a surviving spouse or children, your estate can recover from the TODD property. That proceeding must begin within 18 months of your death (§ 30.1-32.1-12). This includes Medicaid: North Dakota treats Medicaid recovery as a preferred estate claim (§ 50-24.1-07), so property passing by TODD can be reached to repay Medicaid benefits.
How a TODD works in Minnesota
Minnesota’s TODD rules are in Minn. Stat. § 507.071.
You keep full control during your life
A Minnesota TODD transfers your real property to one or more beneficiaries, but the transfer takes effect only at your death. Until then, your beneficiary has no interest in the property, and you can revoke the deed at any time. The main benefit is speed and cost. Your beneficiary can get record title to the property without the delay and expense of opening a probate case.
Married owners
If you’re married, your spouse may need to sign the TODD. Minnesota requires both spouses to sign any conveyance of the homestead Minn. Stat. Section 507.02 and that rule applies to TODDs too.
Key requirements
A Minnesota TODD must:
- Name one or more grantor owners and one or more beneficiaries
- Expressly state that the deed is effective only at the death of one or more grantor owners
- Be recorded (or filed, for registered land) in the county where the property is located before the grantor owner’s death
A TODD that isn’t recorded before death has no effect.
Changing or revoking your TODD
You can revoke a Minnesota TODD at any time by recording a revocation before your death in the county where the property is located. A revocation cancels the entire TODD. If the property is held in joint tenancy and not every owner signs the revocation, it’s effective only if the last surviving owner signed it.
Divorce also matters. Under Minnesota’s revocation-by-divorce rules (Minn. Stat. § 524.2-804), a divorce generally revokes a TODD’s transfer to a former spouse.
Transfer at death
A beneficiary must survive the grantor owner by 120 hours to inherit. To complete the transfer, the beneficiary records three documents in each county where the property is located:
- An affidavit of identity and survivorship
- A certified copy of the grantor owner’s death certificate
- A clearance certificate from the county agency that handles Medical Assistance recovery
The clearance certificate confirms whether the state has a Medical Assistance claim against the property. These documents can be recorded together or separately.
Multiple beneficiaries
You can name more than one beneficiary, and the deed can specify how they’ll hold title: as joint tenants, as tenants in common, or in any other valid form of ownership. You can also name successor beneficiaries who inherit if a primary beneficiary doesn’t. The deed must state the condition under which a successor beneficiary’s interest takes effect.
Co-owned property
If you own property in joint tenancy, a TODD signed by all the owners takes effect only after the last surviving owner dies. If the last surviving joint tenant didn’t sign the TODD, the deed is void. Signing a TODD doesn’t break up (sever) a joint tenancy unless the deed specifically says it does.
Mortgages, Liens, and Medical Assistance
The beneficiary takes the property subject to any existing mortgages, liens, and other encumbrances. Property passing by TODD also remains subject to Minnesota’s Medical Assistance recovery (Minn. Stat. § 256B.15). If you or your spouse received Medical Assistance, the state can file a claim or lien against the property, and the beneficiary can’t clear title without the clearance certificate.
When a TODD Might Not be the Right Fit
A TODD is a simple, inexpensive tool but it isn’t the right one for everyone. Talk to an attorney before using one if:
- Your beneficiary is a minor. A child can’t hold title on their own, so the court may need to appoint someone to manage the property.
- Your Beneficiary receives needs-based public benefits. Inheriting real estate could affect their eligibility.
- You want conditions or staged distributions. A TODD transfer property outright. A trust may give you more control.
- You have blended family or a complicated family situation. A TODD can produce results that don’t match the rest of your estate plan.
- You or your spouse may need long-term care. Medicaid and Medical Assistance recover can reach TODD property in both states.
No matter what your situation is though, if you are considering executing a TODD then we are here to help guide you through the process of determining what is right for you.
This is not meant to constitute legal advice and is being used for informational purposes only. For more information please fill out our intake form or contact Liljenquist Law PLLC.
