When conveying real estate in Oklahoma, including any interest in minerals, there are numerous types of instruments of conveyance a landowner may use. As such, landowners, landmen, and attorneys alike continually need to be aware of any new instruments of conveyance to effectively perform an examination of title or effectuate a sale of real property. Relatively new, a Transfer on Death Deed (TODD) is essentially a simplified instrument to transfer or convey real property upon the death of the owner of such property. This property conveyance can include surface, minerals, fixtures, easements, or other real property interests. Likely, the most unique feature of a TODD is the fact that title to the property described in the deed does not legally vest in the grantees until the death of the grantor. The usual intent and rationale of creating a TODD is to convey title to real property to the designated grantees in the deed at the moment of the death of the grantor without the necessity and burden of initiating a probate or summary administration. This unique provision provides immense flexibility, unlike a life estate.
Although TODDs were used in other states to transfer real property prior to usage in Oklahoma, the Nontestamentary Transfer of Property Act (Title 58, Okla. Stat. §1251, et. seq.) became effective in 2008 in Oklahoma. Although amended a few times after legal, professional, and industry evaluation, this statute provides a new vehicle that real property, including mineral interests, can pass from a landowner to heirs or grantees. To effectuate such transfer, the statute imposes affirmative requirements for acceptance of the conveyance by the grantee(s). The statute provides that acceptance of the property shall be evidenced by recording a signed, notarized affidavit in the office of the county clerk in which the real property is located. This affidavit must be executed by the grantee(s) in the TODD, with an attached certificate of death of the record title owner, and contain detailed information regarding the death of the grantor, the legal description of the property, together with additional information stating whether the grantee was the spouse, children, or heirs of the grantor. The affidavit also has to be filed within nine months of the record title owner’s death in the county records to evidence this affirmative acceptance. If such acceptance does not occur within nine months, the title to the property reverts back to the decedent’s estate to pass through intestacy or testacy, depending on whether the decedent had a valid will.
Benefits of using TODDs:
- Title to the property does not vest until the death of the grantor.
- Title 58 O.S. § 1253 sets out the straightforward language and content to comply with conveyancing laws.
- The grantor may revoke the TODD at any time prior to death, as opposed to a life estate.
- The grantor may change the designation of a grantee at any time, as opposed to a life estate.
- Usage of a TODD can avoid the necessity for probate proceedings.
- Costs of creation of a TODD are very inexpensive.
To conclude, the Nontestamentary Transfer of Property Act, and subsequent statutory usage of TODDs in Oklahoma can provide a simplistic and alternative means by which property owners, particularly small interest holders, can distribute on their estate without the costs and delays of probate. Although relatively simple, a landowner should consult an attorney to ensure that all of the statutory elements have been complied with and that there is a mechanism of acceptance of the property in place following the record title owner’s death. If there are any other topics/issues you would like to discuss with the energy community, or myself, please mention your ideas and thoughts in the comment section. If you would like to discuss TODDs or their effect on real property or mineral title, feel free to email me at email@example.com.
Jordan D. Volino is an attorney at Hampton and Milligan practicing in Oklahoma City, Oklahoma, who specializes in mineral title examination, oil and gas law, property law, as well as federal and Indian title and leasing. Jordan is a member of the Oklahoma Bar Association and the Oklahoma City Association of Professional Landmen. Jordan also is a published scholar, national champion in energy negotiations, and frequently lectures over Oklahoma oil and gas matters.
Adjunct Professor J. David Hampton joined the College of Law faculty in 2008 and the Price College of Business faculty in 2015. Professor Hampton teaches Mineral Title Examination and Real Property Law. After graduating from the University of Oklahoma College of Law in 1980, he founded Hampton and Milligan, a 30-year-old Oklahoma City law firm specializing in oil and gas law title examination, oil and gas litigation, environmental law, and real estate title examination. Currently, Professor Hampton is a lecturer for the American Association of Professional Landmen, as well as the Oklahoma City Association of Professional Landmen.