What Probate Means for Real Estate

When someone dies owning real estate in their name alone, probate is generally required. This is because only a court can legally transfer title after the owner has passed away. Even if a will clearly states who should receive the home, probate is still necessary unless the property was set up to transfer automatically.

Since probate adds delay, cost and administrative effort, many people prefer to take steps during their lifetime to keep their home out of it.

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Own the Property as Joint Tenants

One of the simplest ways to avoid probate is to own your home as joint tenants. In Minnesota, when the deed states joint tenants, the surviving owner automatically becomes the sole owner at the other owner’s death.

This method works well for married couples or co-owners who fully intend for the survivor to inherit the home. However, it does not help if both owners die at the same time. In that situation, probate would still be required.

It is also important to understand the distinction between joint tenants and tenants in common. If a deed lists two owners but does not specify joint tenants, Minnesota law treats it as tenants in common. Property owned as tenants in common always triggers probate when one owner dies.

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Use a Transfer on Death Deed

A transfer on death deed, often called a TODD, is another effective way to avoid probate. This document allows you to name beneficiaries who will inherit your property automatically when you die, as long as they are alive at that time.

A TODD does not give the beneficiary any rights while you are living, and you can revoke or change it at any time. Because of its flexibility and simplicity, it is a popular option for many homeowners who want the property to pass quickly and efficiently.

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Place the Property in a Revocable Trust

If you already have a revocable trust or are considering one, transferring your home into the trust is another way to ensure it avoids probate. Property owned by a revocable trust does not go through probate when you pass away. Instead, your successor trustee follows the instructions in your trust to handle and distribute the real estate.

This option is especially helpful for families with multiple properties, blended family considerations or a desire for additional privacy and control.

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Hold the Property in an LLC

In certain situations, a limited liability company can also help avoid probate. The real estate itself remains owned by the LLC, and you own an interest in the company. When you pass away, your ownership interest may still need to be transferred, but the property itself does not.

This approach is not appropriate for a primary residence because doing so can eliminate important homestead tax benefits. However, it can be useful for cabins, rental properties and land held for investment.

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Frequently Asked Questions

 

1. If I have a will, does my home still go through probate?
Yes. A will provides instructions but does not avoid probate. To bypass probate, the home must be titled or planned for in a way that transfers it automatically.

2. Can I list more than one beneficiary on a transfer on death deed?
Yes. You can list multiple beneficiaries, and you can also name alternates in case someone passes away before you.

3. Should I use a trust or a transfer on death deed?
Both are valid tools. A TODD is simple and cost effective. A trust is more comprehensive and can address multiple assets and complex family situations. The right choice depends on your goals.

Author

Claire creates wills and trusts which provide security and peace of mind. She compassionately listens to her clients’ dreams, goals, and fears and then fashions plans that best meet their needs. It is important to Claire that her clients understand different options and make decisions that are right for them. She loves to educate clients by drawing out complicated concepts.

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