SF 1040

2nd Engrossment - 89th Legislature (2015 - 2016) Posted on 08/11/2016 02:50pm

A bill for an act
relating to titling; providing for transfer-on-death of title to watercraft and motor
vehicles; exempting transfer from motor vehicle sales tax; amending Minnesota
Statutes 2014, sections 256B.15, subdivision 1a; 297B.01, subdivision 16;
proposing coding for new law in Minnesota Statutes, chapters 86B; 168A.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [86B.841] TRANSFER-ON-DEATH TITLE TO WATERCRAFT.
new text end

new text begin Subdivision 1. new text end

new text begin Titled as transfer-on-death. new text end

new text begin A natural person who is the owner of a
watercraft may have the watercraft titled in transfer-on-death or TOD form by including in
the application for the certificate of title a designation of a beneficiary or beneficiaries to
whom the watercraft must be transferred on death of the owner or the last survivor of joint
owners with rights of survivorship, subject to the rights of secured parties.
new text end

new text begin Subd. 2. new text end

new text begin Designation of beneficiary. new text end

new text begin A watercraft is registered in transfer-on-death
form by designating on the certificate of title the name of the owner and the names
of joint owners with identification of rights of survivorship, followed by the words
"transfer-on-death to (name of beneficiary or beneficiaries)." The designation "TOD" may
be used instead of "transfer-on-death." A title in transfer-on-death form is not required
to be supported by consideration, and the certificate of title in which the designation
is made is not required to be delivered to the beneficiary or beneficiaries in order for
the designation to be effective.
new text end

new text begin Subd. 3. new text end

new text begin Interest of beneficiary. new text end

new text begin The transfer-on-death beneficiary or beneficiaries
have no interest in the watercraft until the death of the owner or the last survivor of joint
owners with rights of survivorship. A beneficiary designation may be changed at any time
by the owner or by all joint owners with rights of survivorship, without the consent of the
beneficiary or beneficiaries, by filing an application for a new certificate of title.
new text end

new text begin Subd. 4. new text end

new text begin Vesting of ownership in beneficiary. new text end

new text begin Ownership of a watercraft titled in
transfer-on-death form vests in the designated beneficiary or beneficiaries on the death of
the owner or the last of the joint owners with rights of survivorship, subject to the rights of
secured parties. The transfer-on-death beneficiary or beneficiaries who survive the owner
may apply for a new certificate of title to the watercraft upon submitting a certified death
record of the owner of the watercraft. If no transfer-on-death beneficiary or beneficiaries
survive the owner of a watercraft, the watercraft must be included in the probate estate
of the deceased owner. A transfer of a watercraft to a transfer-on-death beneficiary or
beneficiaries is not a testamentary transfer.
new text end

new text begin Subd. 5. new text end

new text begin Rights of creditors. new text end

new text begin (a) This section does not limit the rights of any
secured party or creditor of the owner of a watercraft against a transfer-on-death
beneficiary or beneficiaries.
new text end

new text begin (b) The state or a county agency with a claim or lien authorized by section 246.53,
256B.15, 261.04, or 270C.63, is a creditor for purposes of this subdivision. A claim
or lien under those sections continues to apply against the designated beneficiary or
beneficiaries after the transfer under this section if other assets of the deceased owner's
estate are insufficient to pay the amount of the claim. The claim or lien continues to apply
to the watercraft until the designated beneficiary sells or transfers it to a person against
whom the claim or lien does not apply and who did not have actual notice or knowledge
of the claim or lien.
new text end

Sec. 2.

new text begin [168A.125] TRANSFER-ON-DEATH TITLE TO MOTOR VEHICLE.
new text end

new text begin Subdivision 1. new text end

new text begin Titled as transfer-on-death. new text end

new text begin A natural person who is the owner of
a motor vehicle may have the motor vehicle titled in transfer-on-death or TOD form by
including in the application for the certificate of title a designation of a beneficiary or
beneficiaries to whom the motor vehicle must be transferred on death of the owner or the last
survivor of joint owners with rights of survivorship, subject to the rights of secured parties.
new text end

new text begin Subd. 2. new text end

new text begin Designation of beneficiary. new text end

new text begin A motor vehicle is registered in
transfer-on-death form by designating on the certificate of title the name of the owner
and the names of joint owners with identification of rights of survivorship, followed by
the words "transfer-on-death to (name of beneficiary or beneficiaries)." The designation
"TOD" may be used instead of "transfer-on-death." A title in transfer-on-death form is
not required to be supported by consideration, and the certificate of title in which the
designation is made is not required to be delivered to the beneficiary or beneficiaries in
order for the designation to be effective. If the owner of the motor vehicle is married at
the time of the designation, the designation of a beneficiary other than the owner's spouse
requires the spouse's written consent.
new text end

new text begin Subd. 3. new text end

new text begin Interest of beneficiary. new text end

new text begin The transfer-on-death beneficiary or beneficiaries
have no interest in the motor vehicle until the death of the owner or the last survivor of
joint owners with rights of survivorship. A beneficiary designation may be changed at any
time by the owner or by all joint owners with rights of survivorship, without the consent of
the beneficiary or beneficiaries, by filing an application for a new certificate of title.
new text end

new text begin Subd. 4. new text end

new text begin Vesting of ownership in beneficiary. new text end

new text begin Ownership of a motor vehicle titled
in transfer-on-death form vests in the designated beneficiary or beneficiaries on the death
of the owner or the last of the joint owners with rights of survivorship, subject to the
rights of secured parties. The transfer-on-death beneficiary or beneficiaries who survive
the owner may apply for a new certificate of title to the motor vehicle upon submitting
a certified death record of the owner of the motor vehicle. If no transfer-on-death
beneficiary or beneficiaries survive the owner of a motor vehicle, the motor vehicle must
be included in the probate estate of the deceased owner. A transfer of a motor vehicle to a
transfer-on-death beneficiary or beneficiaries is not a testamentary transfer.
new text end

new text begin Subd. 5. new text end

new text begin Rights of creditors. new text end

new text begin (a) This section does not limit the rights of any
secured party or creditor of the owner of a motor vehicle against a transfer-on-death
beneficiary or beneficiaries.
new text end

new text begin (b) The state or a county agency with a claim or lien authorized by section 246.53,
256B.15, 261.04, or 270C.63, is a creditor for purposes of this subdivision. A claim
or lien under those sections continues to apply against the designated beneficiary or
beneficiaries after the transfer under this section if other assets of the deceased owner's
estate are insufficient to pay the amount of the claim. The claim or lien continues to
apply to the motor vehicle until the designated beneficiary sells or transfers it to a person
against whom the claim or lien does not apply and who did not have actual notice or
knowledge of the claim or lien.
new text end

Sec. 3.

Minnesota Statutes 2014, section 256B.15, subdivision 1a, is amended to read:

Subd. 1a.

Estates subject to claims.

(a) If a person receives any medical assistance
hereunder, on the person's death, if single, or on the death of the survivor of a married
couple, either or both of whom received medical assistance, or as otherwise provided
for in this section, the total amount paid for medical assistance rendered for the person
and spouse shall be filed as a claim against the estate of the person or the estate of the
surviving spouse in the court having jurisdiction to probate the estate or to issue a decree
of descent according to sections 525.31 to 525.313.

(b) For the purposes of this section, the person's estate must consist of:

(1) the person's probate estate;

(2) all of the person's interests or proceeds of those interests in real property the
person owned as a life tenant or as a joint tenant with a right of survivorship at the time of
the person's death;

(3) all of the person's interests or proceeds of those interests in securities the person
owned in beneficiary form as provided under sections 524.6-301 to 524.6-311 at the time
of the person's death, to the extent the interests or proceeds of those interests become part
of the probate estate under section 524.6-307;

(4) all of the person's interests in joint accounts, multiple-party accounts, and
pay-on-death accounts, brokerage accounts, investment accounts, or the proceeds of
those accounts, as provided under sections 524.6-201 to 524.6-214 at the time of the
person's death to the extent the interests become part of the probate estate under section
524.6-207; and

(5) assets conveyed to a survivor, heir, or assign of the person through survivorship,
living trust, new text begin transfer-on-death of title or deed, new text end or other arrangements.

(c) For the purpose of this section and recovery in a surviving spouse's estate for
medical assistance paid for a predeceased spouse, the estate must consist of all of the legal
title and interests the deceased individual's predeceased spouse had in jointly owned or
marital property at the time of the spouse's death, as defined in subdivision 2b, and the
proceeds of those interests, that passed to the deceased individual or another individual, a
survivor, an heir, or an assign of the predeceased spouse through a joint tenancy, tenancy
in common, survivorship, life estate, living trust, or other arrangement. A deceased
recipient who, at death, owned the property jointly with the surviving spouse shall have
an interest in the entire property.

(d) For the purpose of recovery in a single person's estate or the estate of a survivor
of a married couple, "other arrangement" includes any other means by which title to all or
any part of the jointly owned or marital property or interest passed from the predeceased
spouse to another including, but not limited to, transfers between spouses which are
permitted, prohibited, or penalized for purposes of medical assistance.

(e) A claim shall be filed if medical assistance was rendered for either or both
persons under one of the following circumstances:

(1) the person was over 55 years of age, and received services under this chapter;

(2) the person resided in a medical institution for six months or longer, received
services under this chapter, and, at the time of institutionalization or application for
medical assistance, whichever is later, the person could not have reasonably been expected
to be discharged and returned home, as certified in writing by the person's treating
physician. For purposes of this section only, a "medical institution" means a skilled
nursing facility, intermediate care facility, intermediate care facility for persons with
developmental disabilities, nursing facility, or inpatient hospital; or

(3) the person received general assistance medical care services under chapter 256D.

(f) The claim shall be considered an expense of the last illness of the decedent for
the purpose of section 524.3-805. Notwithstanding any law or rule to the contrary, a
state or county agency with a claim under this section must be a creditor under section
524.6-307. Any statute of limitations that purports to limit any county agency or the state
agency, or both, to recover for medical assistance granted hereunder shall not apply to any
claim made hereunder for reimbursement for any medical assistance granted hereunder.
Notice of the claim shall be given to all heirs and devisees of the decedent, and to other
persons with an ownership interest in the real property owned by the decedent at the time
of the decedent's death, whose identity can be ascertained with reasonable diligence. The
notice must include procedures and instructions for making an application for a hardship
waiver under subdivision 5; time frames for submitting an application and determination;
and information regarding appeal rights and procedures. Counties are entitled to one-half
of the nonfederal share of medical assistance collections from estates that are directly
attributable to county effort. Counties are entitled to ten percent of the collections for
alternative care directly attributable to county effort.

Sec. 4.

Minnesota Statutes 2014, section 297B.01, subdivision 16, is amended to read:

Subd. 16.

Sale, sells, selling, purchase, purchased, or acquired.

(a) "Sale,"
"sells," "selling," "purchase," "purchased," or "acquired" means any transfer of title of any
motor vehicle, whether absolutely or conditionally, for a consideration in money or by
exchange or barter for any purpose other than resale in the regular course of business.

(b) Any motor vehicle utilized by the owner only by leasing such vehicle to others
or by holding it in an effort to so lease it, and which is put to no other use by the owner
other than resale after such lease or effort to lease, shall be considered property purchased
for resale.

(c) The terms also shall include any transfer of title or ownership of a motor vehicle
by other means, for or without consideration, except that these terms shall not include:

(1) the acquisition of a motor vehicle by inheritance from or by bequest of new text begin , or
transfer-on-death of title by new text end , a decedent who owned it;

(2) the transfer of a motor vehicle which was previously licensed in the names of
two or more joint tenants and subsequently transferred without monetary consideration to
one or more of the joint tenants;

(3) the transfer of a motor vehicle by way of gift from a limited used vehicle dealer
licensed under section 168.27, subdivision 4a, to an individual, when the transfer is with
no monetary or other consideration or expectation of consideration and the parties to the
transfer submit an affidavit to that effect at the time the title transfer is recorded;

(4) the transfer of a motor vehicle by gift between:

(i) spouses;

(ii) parents and a child; or

(iii) grandparents and a grandchild;

(5) the voluntary or involuntary transfer of a motor vehicle between a husband and
wife in a divorce proceeding; or

(6) the transfer of a motor vehicle by way of a gift to an organization that is exempt
from federal income taxation under section 501(c)(3) of the Internal Revenue Code when
the motor vehicle will be used exclusively for religious, charitable, or educational purposes.