Minnesota life estate deed

What a life estate deed does in Minnesota

A traditional life estate deed splits ownership across time. You, the life tenant, keep the right to live in and use the property for the rest of your life. The remaindermen you name own everything after that, and their interest vests the moment the deed is delivered; recording protects it against later buyers and creditors. Because their interest is real and present, you can't sell, refinance, or undo the deed without their signatures. That permanence is the whole difference between this and a lady bird deed.

The Minnesota law behind this deed

Minnesota has no section written specifically for life estate deeds. The instrument runs on the general conveyancing and recording statutes below, which is why the requirements here look like those for any other deed in the state.

When Minnesota homeowners use a life estate deed

• Pass a home to children while reserving the right to live there for life
• Start the Medicaid look-back clock on a transfer (state rules vary)
• Avoid probate on the property with a simple, long-established instrument
• Provide for a surviving spouse or partner with the remainder going to your own children

What Minnesota requires on the deed

These are the execution and formatting rules county recorders enforce. Getting any of them wrong is the usual reason a deed comes back in the mail.

How to complete and record it in Minnesota

1. 1Find your current deedYou need the legal description from it, word for word. If you can't find your copy, the County Recorder (or Registrar of Titles for Torrens property) can provide one, usually for a few dollars.
2. 2Identify everyone by full legal nameNames must match the current deed and government ID exactly, middle names included. A mismatch creates a gap in the chain of title that shows up years later at closing.
3. 3Complete the deedDeedly builds it with the wording, notary certificate, and 3-inch first-page margin used for Minnesota deeds.
4. 4Sign in front of a notaryBring photo ID. Wait to sign until you are in front of the notary: you have to appear before the notary anyway, and signing there leaves no question about who signed.
5. 5File an eCRV if the transfer is for more than $3,000An electronic Certificate of Real Estate Value (eCRV), filed online, is required only when the property is sold or transferred for more than $3,000 of consideration, including any mortgage the grantee assumes (Minn. Stat. § 272.115). Gifts and other transfers for $3,000 or less need no eCRV, but the deed should say "This deed transfers Minnesota real property in exchange for $3,000 or less of consideration." Deedly prints that sentence when your answers show it applies.
6. 6Have the county auditor certify itBefore a Minnesota deed can be recorded, the county auditor must certify "no delinquent taxes and transfer entered" on it (Minn. Stat. § 272.12). Any delinquent property taxes must be paid first.
7. 7Record it with the County Recorder (or Registrar of Titles for Torrens property)File in the county where the property is located and pay the recording fee. Many offices in this state also accept e-recording, but usually only from approved submitters such as title companies. Keep the stamped receipt. It fixes your priority date.
8. 8Tell the people you named where it isAt your death they record a certified death certificate, and in some states an affidavit, to show that your life estate has ended. Ask your insurer whether they should be added to the policy now.

What it costs in Minnesota

Minnesota charges a deed tax of 0.33% of net consideration (0.34% in Hennepin and Ramsey, which add a 0.01% Environmental Response Fund tax); $1.65 when consideration is $3,000 or less ($1.70 in Hennepin and Ramsey). Customarily paid by the grantor.

Exemptions that commonly apply to a transfer like this: deeds between former spouses under a marriage dissolution decree (Minn. Stat. § 287.22(14)), transfer on death deeds (§ 287.22(15)), deeds of distribution by a personal representative (§ 287.22(8)), and partition deeds between co-owners (§ 287.22(9)). You have to claim the exemption. The recorder won't apply it for you.

Where to record it in Minnesota

Minnesota deeds are recorded with the County Recorder (or Registrar of Titles for Torrens property) in the county where the property sits, not where you live. There are 87 counties in Minnesota.

Many Minnesota recording offices accept e-recording through vendors such as Simplifile, CSC, or ePN. E-recording is generally open only to approved submitters such as title companies, attorneys, and lenders, so if you prepared the deed yourself, plan to record in person or by mail. Some offices accept filings from the public through those vendors; your county's website will say.

Recording offices we cover in Minnesota: Hennepin, Ramsey, Dakota, Anoka, Washington, St. Louis, Olmsted, Stearns, Scott, Wright. See all Minnesota recording offices.

What a life estate deed does NOT do

Being honest about the limits is more useful than a sales pitch. Every one of these catches somebody out.

• It is not revocable. Once recorded, you can't sell or mortgage the property without every remainderman signing.
• A remainderman's divorce, bankruptcy, or judgment creditor can attach their interest in your home while you're still living in it.
• Because you keep the right to live there for life, the full value is still counted in your estate for federal tax purposes (26 U.S.C. § 2036). That generally gives the remaindermen a stepped-up basis at your death, but it also means the deed does not shrink a taxable estate.
• It is usually treated as a divestment for Medicaid purposes. Get advice before using it for that purpose.

Quirks of Minnesota law that catch people out

• Every Minnesota deed must state each grantor's marital status, and recorders check the acknowledgment for it too. If a grantor is married, the spouse must sign to convey homestead property, even when the spouse is not on the title (Minn. Stat. § 507.02).
• The deed must state the deed tax due or the exemption that applies (Minn. Stat. § 287.241), the name and address of whoever drafted it (§ 507.091), and, on a deed that conveys title now, the grantee's legal name and residential or business address for the property tax statements (§ 507.092).
• An electronic Certificate of Real Estate Value (eCRV) must be filed online when the property is sold or transferred for more than $3,000 of consideration, including any mortgage the grantee assumes, and recorders want its number on page one of the deed (Minn. Stat. §§ 272.115, 287.241). A gift, or any other transfer for $3,000 or less, needs none.
• Delinquent property taxes block recording: the county auditor must certify "no delinquent taxes and transfer entered" on the deed before the recorder will take it (Minn. Stat. § 272.12). A transfer on death deed is exempt from this (§ 507.071, subd. 8).
• Minnesota runs both an abstract system (County Recorder) and a Torrens system (Registrar of Titles). Your prior deed or certificate of title tells you which. If the land is partly abstract and partly Torrens, it must be recorded in both systems, each with its own fee.
• Do not cross out, white out or tape over anything on the deed: Hennepin and Anoka recorders do not accept documents altered with strikeouts, white-out or correction tape. The well disclosure statement on the deed has boxes instead; tick the one that applies (Minn. Stat. § 103I.235).
• After a Minnesota TOD deed takes effect, the beneficiary applies to the county's medical assistance (estate recovery) office for a clearance certificate and records it, with an affidavit of identity and survivorship and a certified death record (Minn. Stat. § 507.071, subds. 3, 20, 23).