Keys & Credit

Avoid Probate: The Power of Transfer on Death Deeds

• Bill Jerikovsky & Barb Miller

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Your carefully crafted will might have a massive blindspot that could cost your heirs thousands of dollars and months of unnecessary stress. In this eye-opening episode, we tackle the critical difference between living wills and Transfer on Death Deeds that every property owner needs to understand.

Most homeowners assume their estate planning is complete once they've created a will, but there's a shocking truth many lawyers won't volunteer: living wills do not transfer real property. Without a specific Transfer on Death Deed in place, your real estate must go through probate—a lengthy, expensive court process—even when your will clearly states who should inherit your home.

We explore why this happens, how to properly protect your real estate legacy, and the sometimes messy complications that arise when property ownership isn't properly documented. You'll learn the crucial difference between joint tenancy and tenancy in common, how these choices affect property transfer after death, and why these distinctions matter especially for unmarried couples, investors, and parents of minor children.

Drawing from real-world examples, we share stories of families caught in legal limbo, including one particularly troubling case where a woman married for 20 years discovered she had no legal right to her deceased husband's home because she was never added to the title. These cautionary tales highlight why understanding property transfer isn't just a legal technicality—it's essential protection for your loved ones.

Whether you're creating your first will or revisiting existing estate plans, this episode provides the knowledge you need to ensure your real estate transfers according to your wishes. Don't leave your biggest asset vulnerable to probate delays and unnecessary expenses. Listen now to protect what matters most.


0:00 Welcome to Keys and Credit

4:15 Transfer on Death Deeds Explained

7:12 Living Wills vs. Real Property Transfer

10:55 How to Avoid Probate Completely

14:27 Joint Tenants vs Tenants in Common

18:00 Estate Planning with Minor Children

20:12 Real-World Horror Stories

Speaker 1:

Welcome to Keys and Credit. Wait a minute, let's start again. Welcome back to Keys and Credit. Welcome back to Keys and Credit, your no fluff, no nonsense, real estate and mortgage podcast. I am Barb Miller and here's my co-host, bill.

Speaker 2:

Bill the no bullshit realtor. What are we talking about today? Barb, title Title. We're going to talk about title, tenancy and transfer on death deeds, right? Yes, this is something you're well-versed in, isn't it? Yeah, and so are you, right, okay?

Speaker 2:

So last week I put out a social media post just kind of poking the bear at lawyers explaining transfer on death deeds, and I got so many phone calls from people who were you know, say their parents were towards end of life, they had a will set out with their lawyer and they heard about this transfer upon death deed. Right? Transfer upon death deed is what transfers real estate after death. Obviously, that's kind of what it says. But if you have a living will, a living will does not transfer real property. So when I put this post out, all these people assumed because they had a living will, they were good, when dad dies, they'll get his house and they can sell his house.

Speaker 2:

Well, without a transfer on death deed, if dad dies and you don't have that, you have to go through probate. Even if the will states the house is yours, you have to go through probate. Even if the will states the house is yours, you have to go through probate. Now, a lawyer's not going to tell you that, right? Why would a lawyer tell you that? I mean they wouldn't. How about? Why wouldn't a lawyer tell you that?

Speaker 1:

Well, it depends upon the lawyer you're working with. Very true, so you're saying a death on transfer deed. Where do they get these?

Speaker 2:

Transfer death deed where do they?

Speaker 2:

get them anywhere. So there's blank conveyance deeds on the minnesota state website. Okay, you can get them there and have it notarized. You can go to a title company. A title company will explain how to do it. They'll do it. Do it for you for a small fee. Okay, and it's done. Transfer upon death deeds can be revoked at any time. They don't affect any ownership whatsoever until you die. Okay, so it's not like you're giving up ownership while you're alive. Um, but the problem is, if you'd have a mediocre or a, you know, icky lawyer, I guess, for lack of a better term, they're not going to tell you. They're going to write out the will, they're going to say everything's good and once dad dies you're going to have to go through probate. Probate's going to take six to eight weeks, sometimes months. The lawyer's going to give you a bunch of billable hours, you're going to have to pay for it and you'll get the property eventually. The courts are just going to make sure it's legit. Now, if you do a transfer upon death deed, you avoid all that.

Speaker 1:

Right. A lawyer could draft that as well so then, um, would you just have this uh in hand, or is it recorded somewhere?

Speaker 2:

it's always recorded. Anything you do with title, anything you do with property, if it's legal, it's recorded. It's always recorded, recorded at the county. Yep, and you can look it up. If you don't know, if you have one so you don't know if your parents got one of these, okay, you can look up the last recorded document on the property. It it's always available. You can call a title company If you don't know where to look. They'll find it for you. Usually you can find it on the internet or you can go into the county courthouse and say, hey, can you show me the last deed of record? And the last deed of record will show if it's either just theirs or if they did a transfer upon death deed.

Speaker 2:

Okay, now, a lawyer most of the time, if they're good I'm not saying all lawyers are bad, but most time if they're good, they'll have this in your estate planning stuff. Yep, they will. They'll say, okay, we got the will for the personal property. We have transfer upon death deed for the real property which is real estate. Um, and you're good. The shady, icky lawyers which we're dealing with people Okay, most people are shady and icky. They'll bill everything out for you. When it comes to the will. They'll say everything's good to go and if you don't suggest a transfer upon death deed, they won't suggest it for you because they're not going to represent you, they're just going to file the paperwork and they get more money for it. It's icky. I've gotten in lots of arguments with lawyers because of this.

Speaker 2:

I had one client we actually had to stamp. I had to go notarize a transfer upon death deed while dad was in hospice. So they heard about this. They called me and said, hey, can you fix it? I said, well, yeah. So I networked title. I talked to them and said, hey, can you give me a transfer upon death deed? They filled it out, I went there, I stamped it and then I lost the transaction because you can't be financially involved in something you notarize. There was an education Dork, that one. But long story short, they didn't have to go through probate. It didn't cost them a bunch of money, right?

Speaker 1:

Right.

Speaker 2:

And if so, say dad dies, they have a living will and they go to sell the property. Okay, we get it under contract, Say we list it. We get it under contract, Say, we list it. We get it on a contract. You all, these people forget about title, they forget about you know, this stuff is important, right?

Speaker 2:

They'll just list it. You get under contract, you send it into your title company. Your title company will stop it, say there's no way this can happen. It needs to go through probate. This purchase agreement is null and void because they're not the owner, right, right, I mean.

Speaker 1:

I've had that happen as well.

Speaker 2:

Yeah, seriously, and on a lender's side, you see it too, because I do it stops Right. You can't borrow money to somebody or borrow money on a property that the person doesn't own. Right, right, correct.

Speaker 1:

Yep. And then, what has to be the owner of record? Well then, it's a delay. And so probate will take, you know, four, six, eight months and lots of money, lots of money, and I mean the time involved in that.

Speaker 2:

So now you're losing your pre-approval, interest rates go up. I mean there's so much that comes with probate because you didn't have a transfer on death deed. So just to reiterate a living will does not transfer real property. It does not. It won't. State of Minnesota does not allow it. The rules state that if the owner of a property is deceased and a new owner does not show up to claim it, it goes back to the original owner. Okay, this is a summary. The original owner is the state of Minnesota. So they want your property. The government is not your friend. Okay, they want your stuff. So if you had a living will, nobody came to claim the property. You went through probate and they decided that it wasn't yours. Guess who's taking it? State, that's what probate's for is to make sure the state doesn't get to take it.

Speaker 1:

You can edit that out.

Speaker 2:

You shut your well if you had better microphones I want to pick that up, but yeah, so when it comes to that stuff, the reason there's probate is because of that the state wants your property. Okay, um, the the purpose of a transfer upon death deed is to just avoid that entirely, entirely well, right, so that your kids can sell the property Instantly. And not have to make payments until probate's done.

Speaker 1:

Yep, it's an instant transfer of.

Speaker 2:

as soon as you die, that property gets transferred to whoever the deed says. It gets transferred to Right and you're done. You own it. I mean, you need a few things like a death certificate, things like that, but you don't need a judge to sign off on anything. You don't need a lawyer. Lawyers are going to get pissed. But today, that's the point of this is to poke at the icky lawyers that aren't telling you this stuff. When it comes to my job, barb's job, we have to make sure that we're covering everybody else's ass right, because a lot of people and we've seen it seen it where we get all the way from listing to purchase agreement, to negotiations, to second negotiations, to appraisal, to title end because it needs to go through probate.

Speaker 3:

It's Cody's fault. Would you recommend anyone to have a transfer on death? What did you call it? Transfer on death deed? Yep, transfer on death deed and also along with a will? Absolutely.

Speaker 2:

If you took the time to go make a will and you have real estate that needs to be in there without question, 100% of the time, all the time. So you, you're young, Don't have to worry about it too much. You know should be all right.

Speaker 1:

We don't know our expiration date though, right, so I suggest it.

Speaker 2:

None of us are getting out of this alive. Just in case anybody didn't know that. But if you took the time to do a will with a lawyer and he didn't suggest a transfer upon death deed, go back to him and say, hey, I want to include this. He can draft it for you, notarize it and you're good, he'll record it. You're off to the races, you're just fine. He won't deny it. He won't say we shouldn't do that because it is the smartest thing to do in an estate. So if you're young, right, and you're the only owner of real estate because, cody, you're married, right, yes, of course you're married.

Speaker 3:

Barely Kind of sort of you just got a new Jeep, so you'll be married for a while.

Speaker 2:

Yes, I am married, but since you have a wife, if you die, depending on oh, we can roll this right into tenancy. If you die and you took title as joint tenants, you die, she gets 100% of your share of the property, without question. There's no worries about it Because that's how you took title, right? They?

Speaker 3:

explain that to you, Because even if the asset is just in my name but we're married, she automatically assumes all of my assets.

Speaker 1:

Unless you bought the property prior to marriage. I had one recently where a seller was selling a property. She was married to her husband for 20 years. He bought the property prior to their marriage and so he bought the property prior to their marriage. They never refinanced, so the wife never went in title, even though in Minnesota it's one to buy two to sell Tell me about that one. And so she was never on title, so she wasn't entitled to the home because the property was purchased prior to their marriage.

Speaker 3:

Good to know. We did buy our house while we were married. Okay, so that's good, we don't have to worry about it.

Speaker 1:

But yes, so in that situation the house, actually because she's not entitled and there was not a will would be going to his one son, because he only has one child, but that son is deceased. So then it's going to the son's three children, and two of those children were minors and one is an adult. So yeah, Greed.

Speaker 2:

What a nightmare Wicked beast.

Speaker 1:

So we've seen so, anyways, that's, that's how that one's rolling out.

Speaker 2:

So she can't sell it.

Speaker 2:

Yeah, and when it comes to estates like that, when greed shows up so we've done lots of estates, lots of trusts, lots of trusts, lots of divorce, things like that If there's a couple hundred thousand dollar property that you didn't know you had and all of a sudden, now you know you have, but somebody else is trying to buy it, you're going to say, no, I'm going to keep it and sell it myself, right? So it gets super weird, super fast, and greed is nasty when you think about it. If you get under contract in a property, you figure out that tenancy is wrong. Somebody else owns it big deal. They're going to sell me the house. Well, what if those people are homeless and they want to keep the house? They're not selling you the house, you get to keep it Agreed. It's icky, nasty, yeah, so when it comes to tenancy. So, cody, when you closed on your house, your agent and your title company explained the difference between joint tenants and tenants in common, correct?

Speaker 3:

Good question, not that I remember.

Speaker 2:

Okay, so joint tenants is what you've hopefully took title as, which most people do. Most married people do joint tenants. We'll get back to this. So, when you die, your wife takes it, okay, no matter what. If you do tenants in common, right. So that means anybody, but that's that thing I sent you. Yeah, um, that means anybody can take title together, okay, but they're taking it separately. Okay, let's delve into that. So tenants in common means if, say, you and I buy a house, we're not married, we take title as tenants in common. I die, it's up on the screen right next to you, yep.

Speaker 2:

So right there, we're talking about the first one on the left. If I die, my half of the property goes to my kids or whoever. My estate is Okay, it doesn't go to Barb, right? If we were joint tenants and I died, it would go to Barb, entirely Okay. So, depending on how you take title, if you took it the wrong way and answered the wrong question at closing because you're all excited, your agent's giving you high fives, barb's there, she gives you a bird feeder, I mean all this crazy stuff happens. You answer the question wrong because nobody was paying attention and you took title as tenants in common. Okay, it's fine, you're living in the house, you're like, all right. Well, now I don't know.

Speaker 3:

So this is for those people who are just together for long periods of time and don't get married legally.

Speaker 2:

Or investors. There's investors too.

Speaker 3:

That live in the same property. Do you have to live there in order to Nope, nope, nope. It's just how you take title. Oh, okay, got it.

Speaker 2:

It's how you state ownership. Got it. They call it. She kicks the bucket. Um. You assume that the house is yours for the next 10 years. You go to sell it in 10 years. Um the her sorry, go ahead.

Speaker 1:

I can see you want to say something, so the deceased, half their heirs would be entitled to the home, so they would have to agree to sell yes, so that's what I'm getting at.

Speaker 2:

So in 10 years? If so, she kicked the bucket. 10 years later, you go to sell. You can't sell it by yourself. You need to figure out who her half went to and get them to agree. If they don't, you're in trouble.

Speaker 1:

And then if you have adult children so I have adult children that are married then their spouses have to sign off on it too.

Speaker 3:

Think about that, so now, if you are a joint tenant, if one of us passes away, it completely 100% goes to the other joint tenant.

Speaker 2:

Without any need for any sort of documentation except for a death certificate.

Speaker 3:

Good to know. Okay, that's kind of a big deal.

Speaker 2:

That's a big deal. Now, if you did tenants in common, you did it the other way and we're back to say your wife died 10 years later and you didn't have a transfer upon death deed for her half. That half's going through probate.

Speaker 3:

Why isn't this a more common thing, like, why is this not something that gets asked? They don't know it.

Speaker 1:

To married couples buying houses Well they oh A title agent.

Speaker 3:

A title company will ask yeah at closing. They generally do ask, but they can't choose for you. I don't know that I've ever been asked this.

Speaker 1:

So generally the title closer would assume, especially if you're married, that you want joint tenants because tenants in common is not a common way to go into title if you're married.

Speaker 2:

This is one of those things where you don't see it what we're doing on the other side. You're buying your house, you're signing all the stuff it's going to be great and title says, hey, do you want to take title as tenants in common or joint tenants? Usually if I'm at the table I'm like joint tenants, you know. So I make sure you don't, you know, say the wrong thing or sign the wrong document or take title. Yeah, that's good fashion, but a lot of them they don't know right, a lot of them don't. I mean your title company will, because that's part of what they know. That's their wheelhouse. Tenancy is a big thing in title Agents. We all know. You go get your shiny new agent license and they don't know fucking anything. You know, I mean there's no other way to say it. They just don't know. And if that one wrong answer, that one wrong answer at closing, could screw up a sale down the road because you don't know what life's going to throw at you, no, right, and that's what we always say. It's always about it's.

Speaker 2:

We do representation relationships. That's what we do. We represent, we don't sell. Because if I was a salesman it would be just sign, sign, sign, sign, sign, sign, sign, congratulations. Woo Right, what if we missed that? What if we missed something else? So transfer upon death deed. Okay, if you do not, very important, I even have one, do?

Speaker 2:

you have one I do not, and that's Wow.

Speaker 1:

I do. Why are you fucking picking on me today? Yours would just automatically go to my daughter's. Okay, so Bill dies. Good call and it goes to probate.

Speaker 2:

I got to go to the courthouse.

Speaker 1:

They would then have to make you know probably six to eight months worth of payments, yep.

Speaker 3:

Right Before selling.

Speaker 1:

Before selling. And let's just say, the house appreciated right. And so there's $50,000, $100,000, whatever in equity. Obviously your kids aren't going to want to just throw that away. They're going to want to sell it, and so if you have a death on transfer deed, transfer on death deed, transfer on death deed, whatever, transfer on death deed, whatever, yeah a death on transfer deed is actually you just die.

Speaker 3:

The second you get the property. Yeah, as soon as you get it, it's over Done.

Speaker 2:

The second you get the property, yeah, so as soon as you get it, it's over, done, okay, whatever. But there's another way too. So, talking about kids, so right now I'm a single dude, okay. I have twins. They're underage, so if I wanted my property to transfer to them, I'd have to put it into a trust, okay, and then the trust could sell the property Because they're minor, because they're minors, and they could hold it or sell it, do whatever they want. They don't need a transfer upon death deed because the property is titled in the trust the trust controls, the trust controls.

Speaker 2:

So the trustee will be the one um selling, you know, dispersing, doing all that stuff. So that's another thing too in your living will, if you are the only one with real property and you have minors, that real property is going to get yourself a trust, set up a trust. A lawyer can help you do that too. If they're old enough, if they're adults, you know, 18 or over, you can just do a transfer on death deed. So there's all these different aspects we have to check in. This is to check into before we even list a house. I'm sure your agent has done all this already, cody, but there's there's so much to it, because if we miss something it stops and it costs a bunch of money. You know if we're in a transaction and we find something.

Speaker 1:

What do you back to that one which one?

Speaker 2:

we're talking about a whole bunch where um husband passed away.

Speaker 1:

Wife was trying to sell it. She had been married to him for 10 years cody might be a murderer on that one. Anyway.

Speaker 3:

Well anyway, Allegedly yes.

Speaker 1:

That due diligence wasn't done and it was caught far down the process where the buyer I was representing this is yours, yeah, yeah. Was representing had already done the appraisal, and then it came to light that she really wasn't authorized to sell the home because she wasn't on title. And that's money they're not getting back. No the buyer Right authorized to sell the home because she wasn't on title.

Speaker 2:

and that's money they're not getting back if it's the buyer right.

Speaker 1:

Yeah, that's, they're just out. So, but the listing agent hadn't done their due diligence on the owner of record so there's a lot more to it than I just killed a spider.

Speaker 2:

um, a lot more to it than just opening a door. Right, representation we always come back to representation. This one is a big one. I didn't realize how big it was until because I, like cody knows, I like pissing people off, poking the bear, seeing what I can get away with, rocking the boat, whatever you want to call it. So I put that one out there just to keep lawyers in check on certain things, right, so they know. Sure, you, you pass the bar exam and you have this, you know license or whatever. You don't fucking know everything, you don't. But when I put it out there, the people that called it was nonstop for like two hours. It was a direct message, a phone call, it was a text message, another direct message, it was nuts, because all these people thought they were good. They paid this lawyer to get their living will done, make sure the property was good, everything was good.

Speaker 2:

So when parents kicked the bucket, they can just move forward, sell the house and they're good, and they couldn't. There was like four of them that couldn't. I mean. Hang on, I won't say names or anything. Let me pull up a messenger here, this guy or girl, or them, they or he, she or whatever. Where is he? If I can find it so, 10 years ago this happened Tenancy, tenancy was wrong on this. I'll just go off of what I can remember. So 10 years ago his dad died. He thought he got the house but his girlfriend took tenancy. So his dad conveyed the property on a transfer upon death deed to his girlfriend without telling anybody. Okay, so when dad died and this was only girlfriend of a couple years or two when dad died she took it, gave it to her kids and there was nothing legally he could do. That was it. That's how icky this can get and how quickly it can go down a dark, dark hole.

Speaker 3:

Well, a lot of that's perspective too In this scenario. That probably is not the right way that it should have worked out, but at the same time it's all perspective.

Speaker 2:

And if that was something, maybe she borrowed him 200 grand and he gave her the house. It was collateral or something that could be too.

Speaker 1:

And dad should have maybe had the conversation with his heirs.

Speaker 2:

This is what I'm doing. So this is all one-sided too. So this is how you should do it. If everything's on the up and up and legit correct 95 of the time, it's not right. I mean, what do we say? I don't know if we should say this out loud, but buyers are liars sellers sellers do that too.

Speaker 2:

You'll ask. I'm dealing with one right now, with a corporation. Um, they're like, hey, bill, we're gonna buy this, we're gonna put this piece of land next to a substation. Um, can you do it to pa sure? And I look it up and here, mom owned it, mom died, she conveyed the property to like cousins or something. And the guy's like, well, I can sell. It's like no, you can't. The last deed of record shows who the owners are and it's not you. That doesn't just because you say so, it doesn't mean that's what's happening. We have to go by the law. I mean, you can't transfer property if you're not the owner. It just doesn't work. So, transfer upon death deed Living will does not transfer real property. Say it enough Living will does not transfer real property Ever, no matter what anybody says Thanks for tuning in when the only thing inflated isn't the market, it's your knowledge.

Speaker 1:

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