Minnesota Session Laws - 2014, Regular Session

CHAPTER 266--H.F.No. 2188

An act

relating to real property; making clarifying and conforming changes relating to ownership of real estate by spouses and mortgage redemption periods; modifying transfer on death deeds;

amending Minnesota Statutes 2012, sections 287.20, subdivision 3a; 358.14; 507.02; 507.071, subdivisions 1, 2, 3, 6, 8, 10; 580.26; Minnesota Statutes 2013 Supplement, section 507.403, subdivision 5a.

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

Section 1.

Minnesota Statutes 2012, section 287.20, subdivision 3a, is amended to read:

Subd. 3a.

Designated transfer.

"Designated transfer" means any of the following:

(1) a transfer between (i) an entity owned by a sole owner, and (ii) that sole owner;

(2) a transfer between (i) an entity in which deleted text begin a husband, a wife, or both deleted text end new text begin one or both spouses who are married to each other new text end are the sole owners, and (ii) deleted text begin the husband, wife, or both deleted text end new text begin one or both of the spouses new text end ;

(3) a transfer between (i) an entity with multiple co-owners, and (ii) all of the co-owners, so long as each of the co-owners maintains the same percentage ownership interest in the transferred real property, whether directly or through ownership of a percentage of the entity;

(4) a transfer between (i) a revocable trust, and (ii) the grantor or grantors of the revocable trust; or

(5) a transfer of substantially all of the assets of one or more entities pursuant to a reorganization, as defined in section 287.20, subdivision 9.

For purposes of this definition of designated transfer, an interest in an entity that is owned, directly or indirectly, by or for another entity shall be considered as being owned proportionately by or for the owners of the other entity under provisions similar to those of section 267(c)(1) and (5) of the Internal Revenue Code.

Sec. 2.

Minnesota Statutes 2012, section 358.14, is amended to read:

358.14 MARRIED PERSONS.

No separate examination of each spouse shall be required, but if deleted text begin husband and wife deleted text end new text begin spouses new text end join in and acknowledge the execution of any instrument, they shall be described in the certificate of acknowledgment deleted text begin as husband and wife deleted text end new text begin in a manner that indicates they are married to each other new text end ; and, if they acknowledge it before different officers, or before the same officer at different times, each shall be described in the certificate as the spouse of the other.

Sec. 3.

Minnesota Statutes 2012, section 507.02, is amended to read:

507.02 CONVEYANCES BY SPOUSES; POWERS OF ATTORNEY.

If the owner is married, no conveyance of the homestead, except a mortgage for purchase money under section 507.03, a conveyance between spouses pursuant to section 500.19, subdivision 4, or a severance of a joint tenancy pursuant to section 500.19, subdivision 5, shall be valid without the signatures of both spouses. A spouse's signature may be made by the spouse's duly appointed attorney-in-fact.

deleted text begin A husband and wife, by their joint deed, deleted text end new text begin Spouses who are married to each other new text end may convey the real estate of either new text begin by their joint deed new text end . A spouse, by separate deed, may convey any real estate owned by that spouse, except the homestead, subject to the rights of the other spouse therein; and either spouse may, by separate conveyance, relinquish all rights in the real estate so conveyed by the other spouse. Subject to the foregoing provisions, either spouse may separately appoint an attorney-in-fact to sell or convey any real estate owned by that spouse, or join in any conveyance made by or for the other spouse. Use of a power of attorney is subject to section 518.58, subdivision 1a. A minor spouse has legal capacity to join in a conveyance of real estate owned by the other spouse, so long as the minor spouse is not incapacitated because of some reason other than that spouse's minor age.

Sec. 4.

Minnesota Statutes 2012, section 507.071, subdivision 1, is amended to read:

Subdivision 1.

Definitions.

For the purposes of this section the following terms have the meanings given:

(a) "Beneficiary" or "grantee beneficiary" means a person or entity named as a grantee beneficiary in a transfer on death deed, including a successor grantee beneficiary.

(b) "County agency" means the county department or office designated to recover medical assistance benefits from the estates of decedents.

(c) "Grantor owner" means an owner new text begin , whether individually, as a joint tenant, or as a tenant in common, new text end named as a grantor in a transfer on death deed upon whose death the conveyance or transfer of the described real property is conditioned. Grantor owner does not include a spouse who joins in a transfer on death deed solely for the purpose of conveying or releasing statutory or other marital interests in the real property to be conveyed or transferred by the transfer on death deed.

(d) "Owner" means a person having an ownership or other interest in all or part of the real property to be conveyed or transferred by a transfer on death deed new text begin either at the time the deed is executed or at the time the transfer becomes effective new text end . Owner does not include a spouse who joins in a transfer on death deed solely for the purpose of conveying or releasing statutory or other marital interests in the real property to be conveyed or transferred by the transfer on death deed.

new text begin (e) "Property" and "interest in real property" mean any interest in real property located in this state which is transferable on the death of the owner and includes, without limitation, an interest in real property defined in chapter 500, a mortgage, a deed of trust, a security interest in, or a security pledge of, an interest in real property, including the rights to payments of the indebtedness secured by the security instrument, a judgment, a tax lien, both the seller's and purchaser's interest in a contract for deed, land contract, purchase agreement, or earnest money contract for the sale and purchase of real property, including the rights to payments under such contracts, or any other lien on, or interest in, real property. new text end

deleted text begin (e) deleted text end new text begin (f) new text end "Recorded" means recorded in the office of the county recorder or registrar of titles, as appropriate for the real property described in the instrument to be recorded.

deleted text begin (f) deleted text end new text begin (g) new text end "State agency" means the Department of Human Services or any successor agency.

deleted text begin (g) deleted text end new text begin (h) new text end "Transfer on death deed" means a deed authorized under this section.

Sec. 5.

Minnesota Statutes 2012, section 507.071, subdivision 2, is amended to read:

Subd. 2.

Effect of transfer on death deed.

A deed that conveys or assigns an interest in real property, deleted text begin including a mortgage, judgment, or any other lien on real property, deleted text end to a grantee beneficiary and that expressly states that the deed is only effective on the death of one or more of the grantor owners, transfers the interest to the grantee beneficiary upon the death of the grantor owner upon whose death the conveyance or transfer is stated to be effective, but subject to the survivorship provisions and requirements of section 524.2-702. A transfer on death deed must comply with all provisions of Minnesota law applicable to deeds of real property including, but not limited to, the provisions of sections 507.02, 507.24, 507.34, 508.48, and 508A.48. new text begin If a spouse who is neither a grantor owner nor an owner joins in the execution of, or consents in writing to, the transfer on death deed, such joinder or consent shall be conclusive proof that upon the transfer becoming effective, the spouse no longer has or can claim any statutory interest or other marital interest in the interest in real property transferred by the transfer on death deed. However, such transfer shall remain an interest as identified in section 256B.15 for purposes of complying with and satisfying any claim or lien as authorized by subdivision 3 of this section. new text end

Sec. 6.

Minnesota Statutes 2012, section 507.071, subdivision 3, is amended to read:

Subd. 3.

Rights of creditors and rights of state and county under sections 246.53, 256B.15, 256D.16, 261.04, and 514.981.

The interest transferred to a beneficiary under a transfer on death deed after the death of a grantor owner is transferred subject to all effective conveyances, assignments, contracts, mortgages, deeds of trust, liens, security pledges, judgments, tax liens, and new text begin any new text end other new text begin matters or new text end encumbrances deleted text begin made by the grantor owner or deleted text end to which the deleted text begin property deleted text end new text begin interest new text end was subject deleted text begin during deleted text end new text begin on the date of death of new text end the grantor deleted text begin owner's lifetime deleted text end new text begin owner new text end , new text begin upon whose death the transfer becomes effective new text end including new text begin , new text end but not limited to, any claim by a surviving spouse deleted text begin or deleted text end new text begin who did not join in the execution of, or consent in writing to, the transfer on death deed, and new text end any claim or lien by the state or county agency authorized by deleted text begin section deleted text end new text begin sections new text end 246.53, 256B.15, 256D.16, 261.04, deleted text begin or deleted text end new text begin and new text end 514.981, if other assets of the deceased deleted text begin owner's deleted text end new text begin grantor's new text end estate are insufficient to pay the amount of any such claim. A beneficiary to whom the interest is transferred after the death of a grantor owner shall be liable to account to the state or county agency with a claim or lien authorized by section 246.53, 256B.15, 256D.16, 261.04, or 514.981, to the extent necessary to discharge any such claim remaining unpaid after application of the assets of the deceased grantor owner's estate, but such liability shall be limited to the value of the interest transferred to the beneficiary. To establish compliance with this subdivision and subdivision 23, the beneficiary must record a clearance certificate issued in accordance with subdivision 23 in each county in which the real property described in the transfer on death deed is located.

Sec. 7.

Minnesota Statutes 2012, section 507.071, subdivision 6, is amended to read:

Subd. 6.

Multiple joint tenant grantors.

If an interest in real property is owned as joint tenants, a transfer on death deed executed by all of the owners new text begin and, if required by section 507.02, their respective spouses, if any, new text end that conveys an interest in real property to one or more grantee beneficiaries transfers the interest to the grantee beneficiary or beneficiaries effective only after the death of the last surviving grantor owner. If the last surviving joint tenant owner did not execute the transfer on death deed, the deed is ineffective to transfer any interest and the deed is void. An estate in joint tenancy is not severed or affected by the subsequent execution of a transfer on death deed and the right of a surviving joint tenant owner who did not execute the transfer on death deed shall prevail over a grantee beneficiary named in a transfer on death deed unless the deed specifically states that it severs the joint tenancy ownership.

Sec. 8.

Minnesota Statutes 2012, section 507.071, subdivision 8, is amended to read:

Subd. 8.

Recording requirements and authorization.

A transfer on death deed is valid if the deed is recorded in a county in which at least a part of the real property described in the deed is located and is recorded before the death of the grantor owner upon whose death the conveyance or transfer is effective. A transfer on death deed is not effective for purposes of section 507.34, 508.47, or 508A.47 until the deed is recorded in the county in which the real property is located. When a transfer on death deed is presented for recording, no certification by the county auditor as to transfer of ownership and current and delinquent taxes shall be required or made and the transfer on death deed shall not be required to be accompanied by a certificate of real estate value. A transfer on death deed that otherwise satisfies all statutory requirements for recording may be recorded and shall be accepted for recording in the county in which the property described in the deed is located. If any part of the property described in the transfer on death deed is registered property, the registrar of titles shall accept the transfer on death deed for recording only if at least one of the grantors who executes the transfer on death deed appears of record to have an ownership interest new text begin or other interest new text end in the new text begin real new text end property described in the deed. No certification or approval of a transfer on death deed shall be required of the examiner of titles prior to recording of the deed in the office of the registrar of titles.

Sec. 9.

Minnesota Statutes 2012, section 507.071, subdivision 10, is amended to read:

Subd. 10.

Revocation or modification of transfer on death deed.

(a) A transfer on death deed may be revoked at any time by the grantor owner or, if there is more than one grantor owner, by any of the grantor owners. new text begin A revocation revokes the transfer on death deed in its entirety. new text end To be effective, the revocation must be recorded in deleted text begin the deleted text end new text begin a new text end county in which at least a part of the real property is located before the death of the grantor owner or owners who execute the revocation. The revocation is not effective for purposes of section 507.34, 508.47, or 508A.47 until the revocation is recorded in deleted text begin the deleted text end new text begin a new text end county in which the real property is located. deleted text begin Subject to subdivision 6, if the real property is owned as joint tenants and if the revocation is not executed by all of the grantor owners, the revocation is not effective unless executed by the last surviving grantor owner. deleted text end

(b) If a grantor owner conveys to a third party, subsequent to the recording of the transfer on death deed, by means other than a transfer on death deed, all or a part of such grantor owner's interest in the property described in the transfer on death deed, no transfer of the conveyed interest shall occur on such grantor owner's death and the transfer on death deed shall be ineffective as to the conveyed or transferred interests, but the transfer on death deed remains effective with respect to the conveyance or transfer on death of any other interests described in the transfer on death deed owned by the grantor owner at the time of the grantor owner's death.

(c) A transfer on death deed is a "governing instrument" within the meaning of section 524.2-804 and, except as may otherwise be specifically provided for in the transfer on death deed, is subject to the same provisions as to revocation, revival, and nonrevocation set forth in section 524.2-804.

Sec. 10.

Minnesota Statutes 2013 Supplement, section 507.403, subdivision 5a, is amended to read:

Subd. 5a.

Liability.

Execution or recording of a wrongful, erroneous, or unauthorized certificate under this section does not relieve the mortgagor or the mortgagor's successors or assigns from any personal liability on the obligations secured by the mortgage, and, in addition to any other remedies provided by law, a person new text begin or entity new text end who wrongfully, erroneously, or without authority executes deleted text begin or records deleted text end the certificate deleted text begin and any entity on whose behalf the certificate is wrongfully, erroneously, or without authority executed or recorded, deleted text end is liable to the mortgagee, the mortgagee's assigns, deleted text begin or deleted text end new text begin and new text end any person or entity for actual damages sustained due to the execution or recording of the certificate, together with reasonable attorney fees, costs, and disbursements incurred by the damaged party as a result. deleted text begin For purposes of this section, "entity" does not include a natural person. deleted text end

Sec. 11.

Minnesota Statutes 2012, section 580.26, is amended to read:

580.26 CERTIFICATE OF REDEMPTION; RECORD.

The person or officer from whom such redemption is made shall make and deliver to the person redeeming a certificate executed and acknowledged in the same manner as a conveyance, containing:

(1) the name of the person redeeming, and the amount paid by the person on such redemption;

(2) a description of the sale for which such redemption is made, and of the property redeemed;

(3) a statement of the claim upon which such redemption is made and, if upon a lien, the amount claimed to be due thereon at the date of redemption.

If redemption is made by the owner of the property sold, the owner's heirs, personal representatives, or assigns, such certificate shall be recorded within four days after the expiration of the deleted text begin year deleted text end new text begin period new text end allowed new text begin by law to new text end the owner for redemption and, if made by a creditor holding a lien, the certificate shall be recorded within four days after such redemption. Unless so recorded, the certificate shall be void as against any person in good faith redeeming from the same person or lien.

Presented to the governor May 14, 2014

Signed by the governor May 16, 2014, 10:48 a.m.