[WSBAPT] Transfer on Death Deed results in uninsured real property

Fri May 7 15:30:18 PDT 2021

This is very interesting. Thank you for sharing.

Kaitlyn

On Fri, May 7, 2021 at 3:16 PM Karl Flaccus <Karl at flaccuslaw.com> wrote:

> That’s interesting and concerning.  Thanks Nick.  I wonder what would
> happen in Washington if, after the fire, the beneficiary disclaims the
> interest, thus putting the house into the Estate?
>
>
>
> Karl
>
>
>
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> *From:* wsbapt-bounces at lists.wsbarppt.com <
> wsbapt-bounces at lists.wsbarppt.com> *On Behalf Of *Nicholas Pleasants
> *Sent:* Friday, May 07, 2021 2:58 PM
> *To:* WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
> *Subject:* [WSBAPT] Transfer on Death Deed results in uninsured real
> property
>
>
>
> Hi All,
>
> Some food for thought on this rainy Friday afternoon. I learned that State
> Farm made some caselaw in the 8th Circuit regarding Transfer on Death
> Deeds. I’ve attached the case for your reference, it is *Dawn
> Strope-Robinson v. State Farm Fire and Casualty*, No. 20-1147 (8th Cir.
> 2021). Here are the basic facts:
>
> State  Farm  Fire  and  Casualty  Company  issued  a  homeowner’s
> insurance  contract  to  David  Strope  for  his  house  in  Orr,
> Minnesota.  On  August  10,  2017,  Strope executed a transfer on death
> deed to convey the property to his niece, Dawn Strope-Robinson.  The
> transfer  on  death  deed  was  then  recorded  on  August  11.  Strope
> died  on  August  14. Six  days later,  Strope’s  ex-wife  intentionally
> set  the house on fire, damaging the home and personal property inside.
>
> The holding is that the house was not insured because it immediately
> vested to the niece, and she was not a named insured on Uncle’s policy. A
> possible point of distinction from the Minnesota statute is that Washington
> would require the recording of the death certificate with a REETA to change
> the property tax over to the beneficiary. But this is rather scary to think
> that the home could become uninsured at any moment because the grantor
> died, and beneficiary, who may or may not even be aware of the Transfer on
> Death Deed, would need to immediately purchase insurance.
>
> I’ve used Transfer on Death Deeds from time to time, especially in
> non-taxable estates with one or a few heirs that get along and want to be
> able to sell the house without probate. But if this holding were binding on
> the 9th Circuit, I would not be inclined to have clients use this
> technique until we come up with a work around for the insurance problem.
>
> I know insurance for a decedent’s estate can be tricky in general,
> especially if the policy is up for renewal shortly after death. Something
> we should explore to better protect the beneficiaries.
>
> Best,
>
> Nick
>
>
>
> *Nicholas Pleasants*
>
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Thank you,

Kaitlyn R. Jackson | Attorney| DIMENSION LAW GROUP PLLC
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