The enactment of the Maine Uniform Probate Code on September 1, 2019, brought with it Title 18-C M.R.S. § 6-401, et seq., the Uniform Real Property Transfer on Death Act, see https://legislature.maine.gov/statutes/18-C/title18-Csec6-401.html, which authorizes the use of transfer on death deeds, sometimes called “Lady Bird Deeds”. During life, a transfer on death deed is revocable even if the deed or another instrument contains a contrary provision. The transfer is not nontestamentary (meaning, it is not subject to probate) but the same degree of capacity required to make a will is required to make or revoke a transfer on death deed.
The essential elements of a transfer on death deed are:
- The deed must contain the essential elements and formalities of a properly recordable inter vivos deed;
- The deed must state that the transfer to the designated beneficiary is to occur at the transferor’s death; and
- The deed must be recorded before the transferor’s death in the public records in the registry of deeds in the county where the property is located.
A transfer on death deed is effective without delivered to the beneficiary during the transferor’s life or consideration (ex. money or money’s worth).
During a transferor’s life, a transfer on death deed does not affect an interest or right of the transferor or any other owner, including the right to transfer or encumber the property. Among other things, it also does not affect the transferor’s or designated beneficiary’s eligibility for any form of public assistance. Effectively, it is as if nothing has happened because, in fact, nothing has. Remember, a transfer on death deed is entirely revocable during life.
If you or a client create a transfer on death deed, should your power of attorney address the circumstances under which an agent (that is, the attorney in fact) under the power can revoke it? Probably. While a transfer on death deed does not affect the transferor’s or designated beneficiary’s eligibility for any form of public assistance during the life of the transferor, that does not mean it is without future ramifications. There will likely be many circumstances where complications with public assistance will arise because of the use of a transfer on death deed that might not have occurred had a more thoughtful vehicle been chosen – one that anticipated the need for future public assistance.
No doubt transfer on death deeds will reduce the number of future ancillary administrations that Maine practitioners will need to deal with and that the courts will have to process.