The Eighth Circuit Court of Appeals issued an opinion on February 5, 2021 that should be of concern to anyone who has put into place a transfer on death deed
The name of the case is "Strope-Robinson v. State Farm Fire & Cas. Co." and is case number 20-1147.
Briefly, David Strope owned a house. He signed and recorded a transfer on death deed to his house on August 11, 2017. The transfer on death deed said that upon his death that the house would automatically go to his niece, Dawn Strope-Robinson. A few days after David Strope died, his ex-wife burned down the house! (Apparently there were some hard feelings between David Strope and his ex-wife. Just guessing there.)
Dawn Strope-Robinson was appointed as special administrator of David Strope's estate (equivalant to an "executor") and made a claim against State Farm for the value of the house.
State Farm turned her down and refused to pay.
Their legal argument was that ownership of the house passed to Dawn Strope-Robinson at the instant that David Strope died, and therefore the estate did not have an "insurable interest" in the house.
This is a scary case. Who knows how many transfer on death deeds have been issued over the years and no thought at all about adding the grantee beneficiary to the insurance policy?
If you have a transfer on death deed in force, please check with your own insurance to see if your grantee beneficiary would be covered.
As always, if I can be of help, call me at 320-252-4473.