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S.F. No. 1040 - Transfer-on-death Title for Watercraft and Motor Vehicles (Second Engrossment)
 
Author: Senator Eric R. Pratt
 
Prepared By: Krista Boyd, Senate Fiscal Analyst (651/296-7681)
 
Date: April 8, 2016



 

Section 1. Transfer-on-death (TOD) of title to watercraft.

Subdivision 1 allows a TOD beneficiary designation to be entered on a watercraft certificate of title. This designation is subject to the rights of creditors.

Subdivision 2 specifies the information that must be included on the title certificate to accomplish registration in TOD form. The beneficiary is not required to pay for the designation or transfer, and the title does not need to be delivered to the beneficiary for the designation to be effective.

Subdivision 3 provides that a TOD beneficiary has no interest in the watercraft until the death of the owner. The owner or joint owners with rights of survivorship may change the TOD designation without the beneficiary’s consent by applying for a new certificate of title.

Subdivision 4 provides that watercraft ownership vests in a TOD beneficiary upon the death of the owner or the last surviving joint owner, subject to the rights of secured parties. The TOD beneficiary may obtain a new certificate of title upon providing a certified death record of the transferor. If no TOD beneficiaries survive the transferor, the watercraft is included in the probate estate of the deceased owner. A TOD transfer is not a testamentary transfer.

Subdivision 5, paragraph (a) states that this section does not limit the rights of secured parties or creditors of the owner against a TOD beneficiary.

Paragraph (b) clarifies that claims for medical assistance, from county social service agencies, or from the Department of Revenue against the transferor’s watercraft are all claims from a creditor and continue to apply against the beneficiary after the watercraft has been transferred.

Section 2. Transfer-on-death (TOD) of title to motor vehicle.

Subdivision 1 allows a TOD beneficiary designation to be entered on a motor vehicle certificate of title. This designation is subject to the rights of creditors.

Subdivision 2 specifies the information that must be included on the title certificate to accomplish registration in TOD form. The beneficiary is not required to pay for the designation or transfer, and the title does not need to be delivered to the beneficiary for the designation to be effective.  An owner who is married at the time of designation must have the spouse’s written consent to designate a beneficiary other than the spouse.

Subdivision 3 provides that a TOD beneficiary has no interest in the motor vehicle until the death of the owner. The owner or joint owners with rights of survivorship may change the TOD designation without the beneficiary’s consent by applying for a new certificate of title.

Subdivision 4 provides that motor vehicle ownership vests in a TOD beneficiary upon the death of the owner or the last surviving joint owner, subject to the rights of secured parties. The TOD beneficiary may obtain a new certificate of title upon providing a certified death record of the transferor. If no TOD beneficiaries survive the transferor, the motor vehicle is included in the probate estate of the deceased owner. A TOD transfer is not a testamentary transfer.

Subdivision 5, paragraph (a) states that this section does not limit the rights of secured parties or creditors of the owner against a TOD beneficiary.

Paragraph (b) clarifies that claims for medical assistance, from county social service agencies, or from the Department of Revenue against the transferor’s motor vehicle are all claims from a creditor and continue to apply against the beneficiary after the motor vehicle has been transferred.

Section 3. Estates subject to claims. Adds TOD titles or deeds to the list of assets to be considered as a part of the decedent’s estate to determine medical assistance claims by the state.

Section 4. Sale, sells, selling, purchase, purchased, or acquired.  Excludes a vehicle transferred by TOD of title from the definition of “sales, sells, selling, purchase, purchased or acquired” in the chapter of statute regarding sales tax on motor vehicles. This allows a motor vehicle to transfer to a beneficiary without paying the sales tax.

 
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