Life Estate Deeds Vs. Transfer On Death Deeds – Pros And Cons

On Behalf of | Nov 8, 2021 | Firm News |

North Dakota currently recognizes two forms of lifetime real property transfer deeds in which the owner or grantor retains control of the property while living. The two forms are the life estate deed and the transfer on death deed. I get many calls regarding the differences between these two options and questions and concerns regarding the benefits and the negatives of each form.

The life estate deed is the most familiar way of transferring real property or minerals outside or probate, in North Dakota, will allowing the owner/grantor to retain control of the property. A life estate deed transfers property after the death of the grantor/owner while allowing that person to retain control of the property during their lifetime. This deed can be set up by joint owners to continue until the death of the surviving joint owner. These transfers are not subject to medicaid look back rules. The main drawback to this form of transfer is it requires the signatures of the individuals to receive the property upon the death(s) of the owner(s) in order to make a disposition of the property by life tenant.

The transfer on death deed is a more recent development in North Dakota. This format allows the owner/grantor to retain control of the property during life in the same was the life estate deed. This deed can also be set up by joint owners and continue until the death of the surviving joint tenant. Furthermore it also allows for a transfer of the real property outside of a probate proceeding. The main advantage to this form is that it can be revoked by the grantor/owner at anytime without the need to notify or obtain signatures from the individuals named to receive the property at death. This allows for easier disposition of assets by the grantor/owner during life. The main drawback is that property to be transferred via transfer on death is subject to look back and can be seized to repay Medicaid.

It is important to consult with your attorney to discuss your particular situation and needs as one form may be a better tool to utilize based on your particular circumstances.