Trap for the unwary in Transfer on Death Deeds

 The Eighth Circuit Court of Appeals issued an opinion on February 5, 2021 that should be of concern to anyone who has put into place a transfer on death deed. 

The name of the case is "Strope-Robinson v. State Farm Fire & Cas. Co." and is case number 20-1147.

Briefly, David Strope owned a house.  He signed and recorded a transfer on death deed to his house on August 11, 2017.  The transfer on death deed said that upon his death that the house would automatically go to his niece, Dawn Strope-Robinson.  A few days after David Strope died, his ex-wife burned down the house!  (Apparently there were some hard feelings between David Strope and his ex-wife.  Just guessing there.)

Dawn Strope-Robinson was appointed as special administrator of David Strope's estate (equivalant to an "executor") and made a claim against State Farm for the value of the house.

State Farm turned her down and refused to pay.

Their legal argument was that ownership of the house passed to Dawn Strope-Robinson at the instant that David Strope died, and therefore the estate did not have an "insurable interest" in the house.

This is a scary case.  Who knows how many transfer on death deeds have been issued over the years and no thought at all about adding the grantee beneficiary to the insurance policy?

If you have a transfer on death deed in force, please check with your own insurance to see if your grantee beneficiary would be covered.

As always, if I can be of help, call me at 320-252-4473.

Two myths about wills

 There are several myths about wills.

One common myth is that you can write out a will in your own handwriting.   This is usually called a "holographic will", (not to be confused with the holodeck on the Starship Enterprise).

A holographic will may be valid in some states, but is NOT VALID in Minnesota.  So, don't try it!

In Minnesota a will must be signed by the person who makes the will (the "testator") and must be witnessed by two witnesses. We often add a notarized section to a will.  This is not because of the will itself, but because of something called a "self-proved affidavit".  A "self-proved affidavit" is intended to help in the probate process because at the time you have the court approve the petition for probate and appoint the personal representative, you do not need to find the witnesses and have them testify to the court that they saw the will being executed. In effect, the witnesses to a self-proved will testify in advance. Finding the witnesses could be hard, or perhaps impossible, so this can be a very valuable add-on to a will.  The statutory cite is Minn. Stat. 524.2-504.  I should add that due to the Covid-19 pandemic, the legislature has temporarily allowed some wills which are technically defective to be probated anyway.  However, I think it is much better to comply with the statutory requirements than try to convince a judge that it is "close enough".

A second common myth is that a person who benefits under a will cannot be a witness.  Minn. Stat. 524.2-505 says:  "(b) The signing of a will by an interested witness does not invalidate the will or any provision of it."

Frankly, I think it is better practice to have someone other than a beneficiary witness your will, but in a technical sense it is okay.

Let me know if I can help you with a will and other estate planning issues by calling me at 320-252-4473.