Sen. Bailey bill to protect transfer on death deed recipients signed into law, becomes effective immediately

AUGUSTA — On Wednesday, March 16 Gov. Janet Mills signed a bill from Sen. Donna Bailey, D-Saco, that would protect transfer on death deed recipients. An amended version of the bill, LD 1752, “An Act To Provide Insurance Coverage for a Beneficiary on a Transfer on Death Deed,” will take effect immediately.

“Although this is the ‘short session’ of the Legislature, I still wanted to accomplish something important. Now that it’s been signed by the Governor, this bill will reduce some of the emotional strain that families and loved ones cope with when someone passes away,” said Sen. Bailey. “This bill extends insurance coverage on an inherited property for 90 days, which gives the designated beneficiary protection for the property and – most importantly – time to process their grief. Thank you to my colleagues in the House and Senate, as well as Gov. Mills, for your support.”

A transfer on death deed transfers a home or property to another person after the death of the homeowner. As amended, LD 1752 will protect Maine transfer on death deed properties and recipients by requiring the property insurance company to extend the homeowner’s insurance policy to the designated beneficiary of a transfer on death deed for 90 days. In order for this to happen, the recipient must file a notice of death affidavit to the insurance company within 30 days of the homeowner passing away. The law also limits the coverage to the property being transferred, requires the beneficiary to comply with the insurance policy conditions and allows the insurer to have proof of the recipient’s status as a designated beneficiary.

The idea for this law came from a court case, Dawn Strope-Robinson v. State Farm Fire and Casualty, in which the deceased person’s transfer on death deed homeowner’s insurance policy terminated on their day of death. Before the deed recipient could take out their own homeowner’s insurance for the property they inherited, the house sustained fire damage.

Because LD 1752 was an emergency measure, the law goes into effect immediately.

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