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Law

MT Senate Bill 225

Notary Law Update: MT Senate Bill 225

State: Montana

Summary:

Montana enacts the Uniform Real Property Transfer on Death Act, authorizing a property owner to transfer interest in the property to a beneficiary upon the death of the owner through a Transfer on Death Deed that must be notarized and filed in the local land records.

Signed:  May 07, 2019

Effective:  October 01, 2019

Chapter: 313

Affects:

Creates as yet uncodified sections in Montana Code Annotated.

Changes:
  1. Permits the transfer of real property via a transfer on death (TOD) deed upon death of the owner.
  2. Requires a transfer on death deed to conform to the formalities (e.g. acknowledgment, notarization) of an inter vivos deed.
  3. Requires the transfer on death deed to be recorded prior to the grantor's death.
  4. Provides that the transfer on death deed is non-testamentary (a TOD deed is not a “last will” and is not required to be probated as such).
  5. Provides that the capacity required to make or revoke a transfer on death deed is the same as the capacity required to make a will.
  6. Provides a TOD deed and optional revocation of TOD deed form.
Analysis:

The Uniform Law Commission (ULC) describes the Uniform Real Property Transfer on Death Act as follows: It “enables an owner of real property to pass real property simply and directly to a beneficiary on the owner’s death without probate. The property passes by operation of law by means of a recorded transfer on death (TOD) deed. During the owner’s lifetime, the beneficiary of a TOD deed has no interest in the property and the owner retains full power to transfer or encumber the property or to revoke the deed. On the owner’s death, the property passes to the beneficiary, much like the survivorship feature of joint tenancy. The TOD deed offers a number of advantages over joint tenancy. Because the TOD deed does not convey an immediate interest to the beneficiary, the property is not subject partition or to the beneficiary’s creditors. The deed remains revocable, enabling the owner to make a different disposition of the property. It does not trigger an acceleration clause in a mortgage or a property tax reassessment during the transferor’s life. Nor does it create adverse Medicaid consequences for either the owner or the beneficiary. A decedent routinely passes personal property to a named beneficiary outside of probate. Common examples include a beneficiary designation in a life insurance policy or pension plan, registration of securities in TOD form, and a pay on death bank account. But a straightforward, inexpensive, and reliable means of passing real property (which may be the decedent’s major asset) directly to a beneficiary is not generally available.”

Read the bill text.

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