Bulletin: WY2017003

Dear Associates:

This Bulletin describes the Wyoming Transfer on Death Deed statute (Wyo. Stat. § 2-18-101, et. seq.), which went into effect on July 1, 2013. This bulletin provides underwriting guidelines relating to insuring real property affected by a Transfer on Death Deed.

The Transfer on Death Deed

Wyo. Stat. § 2-18-101, et. seq. created a Transfer on Death Deed (“TODD”) as an alternative to a Will to make a real property conveyance effective upon the death of the grantor-owner. Title to real property may be transferred upon the death of a grantor-owner by recording a TODD, executed as provided by law, in the office of the county clerk in the county in which the real property is situated. In order to be effective, the TODD must be recorded prior to the death of the grantor-owner. A TODD may name multiple grantee-beneficiaries and may also designate a successor grantee-beneficiary to receive the real property if the primary grantee-beneficiary does not survive the grantor-owner. Wyo. Stat. § 2-18-104 provides a template for a TODD.

The TODD is only effective upon the death of the grantor-owner and does not need consideration to be effective. Similarly, the grantee-beneficiary does not need to execute the deed, consent to, or even be notified about the TODD in order for the TODD to be effective. During the grantor-owner’s lifetime, the grantee-beneficiary has no right, title or interest in and to the real property that is the subject of the TODD. If a grantor-owner executes and records more than one TODD concerning the same property, the last TODD that is recorded before the grantor-owner’s death is the effective TODD.

Transfer of Title Upon Death of Grantor-Owner

Title to the real property transferred by a TODD vests in the designated grantee-beneficiary upon the death of the grantor-owner. Proof of death of the grantor-owner is exclusively established by recording an affidavit as provided under Wyo. Stat. § 34-11-101 and an accompanying certificate of clearance (Wyo. Stat. § 2-18-103(n)(ii)) in the office of the county clerk of the county in which the real property is situated. The affidavit shall identify the TODD by book and page or document number. The certificate of clearance shall be issued by the Wyoming Department of Health and shall certify that all medical assistance claims have either been satisfied or do not exist.

The grantee-beneficiary takes title to the grantor-owner’s interest in the real property subject to all conveyances, assignment, contracts, mortgages, deeds of trust, liens, security pledges, and other encumbrances by the grantor-owner or to which the grantor-owner was subject during the grantor-owner’s lifetime. The grantee-beneficiary also takes title subject to any interest in the real property of which the grantee-beneficiary has either actual or constructive notice.

A grantee-beneficiary may refuse to accept all or any part of the real property interest conveyed by a TODD. If a grantee-beneficiary refuses to accept or disclaims any real property interest, the grantee-beneficiary shall have no liability by reason of being designated as grantee-beneficiary.

Joint Tenancy

A joint tenant may use a TODD, without severing a joint tenancy, to transfer his or her interest in the real property. However, title shall only vest in the designated grantee-beneficiary if the joint tenant grantor-owner is the last to die of all of the joint tenants. If the joint tenant grantor-owner is not the last joint tenant to die, the TODD has no effect.

A TODD may designate multiple grantee-beneficiaries who take title as tenants by the entirety, joint tenants with right of survivorship, tenants in common, or any other tenancy that is valid under the laws of Wyoming.

Revocation of a TODD

The grantor-owner may revoke the TODD at any time by executing a revocation, as provided by law and recording it in the office of the county clerk in the county in which the real property is situated, before the death of the grantor-owner. If there is more than one owner, any of the owners who executed the TODD may execute the revocation. However, if the real property is owned in joint tenancy with right of survivorship, if the revocation is not executed by all of the grantor-owners who executed the TODD, the revocation is not effective unless executed by the last surviving grantor-owner.

Wyo. Stat. § 2-18-105 provides a template for a revocation of a TODD.

Claims of the Wyoming Department of Health

If an individual who is a recipient of medical assistance (i.e. Medicaid) conveys an interest in real property by way of a TODD, the Department of Health may assert a lien against the real property that is the subject of the TODD for the amount which would have been recoverable against the grantor-owner's estate pursuant to Wyo. Stat. §42-4-206. The Department of Health may record a lien against the real property immediately upon the death of the grantor-owner. For this reason, no real property that is the subject of a TODD should be insured without first obtaining and recording a certificate of clearance from the Department of Health as discussed in this Bulletin.

Underwriting Guidelines

A.  TODD of Record During Grantor-Owner’s Lifetime

1.  If a TODD appears in the chain of title, the TODD should be shown as an exception in Schedule B of the title commitment. The exception should read substantially as follows: “The interest of [name of grantee(s)] created by TODD from [name of grantor(s)] recorded ___________ under Reception No. ___________, under the provisions of Wyo. Stat. § 2-18-101, et. seq.”

2.  If you are issuing a Loan Policy, the exception for the TODD shall be shown in Schedule B, Part II.

3.  You may rely on one of the following to remove a TODD exception:

a.  A properly executed and recorded transfer to a third-party purchaser by all of the grantor-owners under the TODD; or

b.  The recording of a revocation of the TODD as described above.

B.  TODD of Record and Grantor-Owner is Deceased

1.  You may rely on a TODD to pass title to and insure the named grantee-beneficiary if you confirm all of the following:

a.  There is no other TODD executed and recorded by the grantor-owner during their lifetime and which was recorded after the present TODD.

b.  The record does not disclose a revocation of the TODD that was signed and recorded by the grantor-owner during their lifetime.

c.  Evidence of the death of the grantor-owner(s) as evidenced by recording of the affidavit and certificate of clearance as described above.

d.  If multiple grantor-owners appear on the TODD, you must determine that all of the original grantor-owners have passed away.

e.  If the property was held in joint tenancy, the grantor-owner on the TODD must be the last surviving joint tenant.

f.  The following must be contained in the Schedule B requirements of the title commitment: “Evidence satisfactory to the Company that the Estate of [name of deceased grantor-owner], deceased, is not subject to the Federal Estate Tax, pursuant to the Internal Revenue Code, 26 U.S.C. § 6324(a).” 

2.  You may rely on a TODD to pass title to and insure a bona fide purchaser or lender of the named grantee-beneficiary if items “a” through “e” above been satisfied and item “f” above is included in the Schedule B requirements of the title commitment.

This Bulletin is intended to provide general information on the statutes affecting TODDs in Wyoming. If you have any additional questions on specific scenarios or procedures, please do not hesitate to contact Stewart Title Guaranty underwriting personnel. 

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

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