Probate & Trust Law Section Conference Manual ... - Minnesota CLE

Authority: Minn. Stat. § 287.22(15).
C. CERTIFICATES OF REAL ESTATE VALUE; CONSERVATION
FEES; AND WELL DISCLOSURE CERTIFICATES
If a TODD is exempt from deed tax, is it also exempt from other recording
fees and filing requirements?
Because there is no deed tax, no certificate of real estate value is required,
there is no need to pay conservation fees, and no well disclosure certificate
is required.
Authorities: Minn. Stat. §§ 40A.152, Subd. 1; 287.241, Subd. 1; and
103I.235, Subd. 1(c).
A TODD must comply with all the general laws applicable to deeds, such
as signatures by spouses, acknowledgement of signatures, and drafting
statement.
Authority: Minn. Stat. § 507.071, Subd. 2, cross referencing Minn. Stat.
§§ 507.02, 507.24, 507.34, 508.48 and 508A.48.
D. TAX CONSEQUENCES
Does the Grantor Owner have to file a gift tax return for a TODD?
No, the Grantor Owner does not have to file a gift tax return for a TODD.
Execution and recording of a TODD is an incomplete gift since the owner
retains full use of the property with a power to revoke and therefore for
gift tax purposes a gift does not occur upon execution of the TODD.
Since the property will be subject to estate tax in the Grantor Owner’s
estate there will be a step-up in basis under I.R.C. § 1014(a)(1).
Authorities: Reg. § 25.2511-2; I.R.C. § 1014(a)(1).
E. CAPACITY TO EXECUTE A TODD
What capacity is required for a Grantor Owner to execute a TODD?
The statute does not indicate the level of capacity required to execute a
TODD. One of the authors believes that the level of capacity required
should be the same as the level of capacity required to execute a will
because a TODD is a will substitute, and, like a will, has effect only at
death. The other author believes that the question is interesting as an
academic question, but that it probably makes little or no difference
because a TODD is a deed and not a will. A TODD would be challenged
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