Bulletin: MT2015001

Date:
February 05, 2015
To:
All Montana Issuing Offices
RE:
UNDERWRITING - Beneficiary Deeds

Dear Associates:

Montana has recognized beneficiary deeds since the enactment of M.C.A. § 72-6-121, effective October 1, 2007. A beneficiary deed allows an owner of property to pass title to one or more designated beneficiaries upon the owner's death and is a mechanism for avoiding probate. The beneficiary has no interest in the property while the grantor is alive and the beneficiary's creditors cannot attach the property during the grantor's life. At the grantor's death, the property passes to the beneficiary automatically.

To be valid, a beneficiary deed must:

  • Have the requisite formalities of a deed, contain a statement that the transfer is effective on the death of the grantor and name the beneficiary or beneficiaries; and
     
  • Be recorded before the grantor's death in the county where the property is located.

A beneficiary deed does not affect the grantor's creditors or liens that arise upon the grantor's death, such as estate taxes or medical care reimbursement liens. The grantor may also convey or encumber the property.

A beneficiary deed is revocable by the grantor. The revocation must expressly revoke the beneficiary deed, be acknowledged after the deed being revoked and be recorded before the grantor's death in the county where the property is located. The signature, consent or notice to a beneficiary is not required for the grantor to revoke. A beneficiary deed is not revoked by a will.

The beneficiary takes the property subject to all encumbrances, liens, interests, deeds of trust or mortgages, claims, including estate taxes or any interest that the property was subject to at the grantor's death. This includes creditor claims which must be asserted within 1 year after the date of death of the grantor. Medicaid can assert claims against the estate or beneficiary for 3 years after date of death.

You must obtain Stewart underwriter approval if you are insuring a transaction where a beneficiary deed conveyed title to a beneficiary and less than 3 years have elapsed from that time.  Depending on the circumstances, such as a very recent death of the grantor or questions regarding revocation, we may require a probate.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

Statutory Forms

 

   Beneficiary Deed
         I (we) ............(owner) herby convey to ..................(grantee beneficiary) effective on my
(our) death the following described real property:
         (Legal description)
         If a grantee beneficiary predeceases the owner, the conveyance to that grantee beneficiary must either (choose one):
         [                   ]Become void.
         [                                ]Become part of the estate of the grantee beneficiary.
         ………………….
         (Dated)
         ………………
         (Signature of grantor(s))
         (acknowledgment) 

 

 

   Revocation of Beneficiary Deed
         The undersigned hereby revokes the beneficiary deed recorded on …(date), in docket or
book……….at page……., or instrument number……records of……..County, Montana,
concerning the following described real property:
         (Legal description)
         Dated:…………………..
         ………………………
         Signature
         (acknowledgment)

 

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None