Real Property Planning

On Behalf of | Jul 29, 2019 | TIps and News |

In North Dakota if you have an ownership interest in real property that is not jointly held you are opening yourself up to having a probate procedure opened when you pass away. Under North Dakota law any interest in real property, be it surface or mineral, cannot be transferred after death without the appointment of a personal representative through a probate proceeding. I have seen this occur in a number of situations where the estate is small and there is no need for a probate outside of the property interest. In most cases the surviving heirs or the estate has little money for a probate proceeding.

There are very quick and affordable solutions to prevent the costly and time consuming process of a probate. Two options I see most are life estate deed transfers and transfer on death deeds.

A life estate deed transfers the property interest to whomever the owner names in the deed upon the death of the grantor. This type of transfer creates an immediate vested interest in the names of the people listed in the document. The grantor retains all use, income and control of the property during their life. Since there is a recorded document with owners after death this document removes the property from the owner’s estate and eliminates the need for probate. The drawback to this form of transfer is that it requires the signatures of all the people named in the deed to make any change or any transfer of the property.

A transfer on death deed accomplishes the same end result as the life estate deed, it removes the property from the estate and accomplishes a transfer without the need for probate. The main difference with a life estate deed is the grantor or owner can revoke it at anytime prior to death and replace it if they wish. There is no need for anyone else to sign off on the transfer. A transfer on death deed is wholly revocable.

Each form of transfer has its benefits and each situation is unique. To best address your specific needs you should contact a real estate and estate planning attorney to discuss a plan to best transition your assets and property.