This post is a guest post from the DAEE’s Family Economics Specialist Marsha Goetting. More of Marsha’s estate planning work can be found here.
Would you believe you can transfer your Montana real property at death without potentially costly probate? Unbelievably, the Montana legislature passed a statute allowing for transfer on death deeds, or TODDs, which allow Montanans to pass real property to loved ones without going through the probate process. This could save your estate thousands of dollars.
Since October 1, 2019, Montana residents have been able to file a TODD on real property located in Montana. Prior to that time Montanans could use a beneficiary deed for this purpose. If you filed a beneficiary deed prior to October 1, 2019, your deed is still effective. You do not need to refile with a TODD.
With a TODD, your Montana real property will pass to your designated beneficiary upon your death. Whether you have a house or substantial acreage, a TODD allows the property to pass to your beneficiaries without it going through the probate process. Designated beneficiaries may be your spouse, children, grandchildren, other relatives, friends, or nonprofit or charitable organizations. A designated beneficiary has absolutely no ownership rights in your Montana real property until you die. Your beneficiary cannot use your home as collateral for a loan.
You record your TODD with the clerk and recorder in the county where your property is located. If you own land in Gallatin and Custer counties you file two TODDs. The TODD must have a complete legal description of the Montana property that will transfer after your death. Do not use the shortened description appearing on the property tax bill sent by the county treasurer. Find your original deed. Did you store it in your safe deposit box?
Keep in mind that after you have sign and recorded a TODD, you cannot revoke it by a provision in your will. For example, if you record a TODD naming your daughter as a beneficiary and then later have a provision in your will that leaves that same property to your son, the real property will pass to your daughter under the terms of the TODD. If you want the property to pass to your son, you need to revoke the TODD or record a new one.
A TODD is a contract —like payable on death beneficiary designations (PODs) on financial accounts and transfer on death registrations (TODs) on stocks, bonds and mutual funds,”
More information about TODDs can be found in the new MontGuide from MSU Extension here. The site also provides a TODD form and another form for revoking a TODD.