Transferring a Decedent’s Real Property in South Dakota

What happens to your assets when you die? Depending on how your property is titled, they become part of your estate, and are subject to administration in probate. Probate is the legal process of settling a decedent’s estate and distributing assets to those designated to receive them, whether through devise by will or by laws of intestate succession.

South Dakota has enacted the Uniform Probate Code, codified as part of the South Dakota Codified Laws at Title 29A. The Uniform Probate Code is a set of laws developed by the Uniform Law Commission to standardize probate procedures across states.

The necessity for probate depends upon the overall size of the estate and the way the decedent held title to property. Considering the intentions in the event of one’s death is part and parcel of proper estate planning, and can facilitate an efficient probate process. Typically, property that a decedent owned as an individual is subject to probate. Property titled with a survivorship right or beneficiary designation transfers outside of probate.

Probate proceedings may follow formal or informal proceedings, the former requiring more direct court oversight. Formal probate proceedings are governed by chapter 29A-3, Part 4; informal proceedings are governed by Part 3. Part 5 probate, or supervised administration, may be appropriate for circumstances requiring mediation. Consult a lawyer with questions.

At death, a decedent’s property devolves to his or her devisees (those named in a will to receive the decedent’s property) or heirs (those entitled to receive the decedent’s property when the decedent dies intestate, or without a will) subject to claims, exemptions, a surviving spouse’s elective share, and the personal representative’s right to take possession for purposes of administration (SDCL 29A-3-101, 29A-3-709.). Any part of the estate not disposed of by will is devised by South Dakota’s laws of intestate succession, located under Chapter 29A-2.

A personal representative (PR) is the fiduciary entrusted to settle the decedent’s estate, and may be referred to as an executor when named by the decedent’s will, or an administrator when selected by the court to administer an intestate estate. When the PR of an estate holds title to property, he holds it in a fiduciary capacity for the purposes of administration (43-4-2).

To legally transfer property devised by a will, the will must be delivered to the probate court and proved valid (29A-3-102). The venue for opening probate is typically the probate court in the county where the decedent maintained permanent residence (29A-3-201). If the decedent owns real property in another jurisdiction, then ancillary probate is required.

The court validates a will by issuing an order of probate. Probate requests may be combined, meaning that a petition for probate and appointment of a personal representative may be simultaneous (29A-3-107). The requirements for an interested person’s petition for informal probate in testate and intestate estates are codified at 29A-3-301.

Administration of the estate begins when the court issues letters to the PR (29A-3-103). Letters are a document evidencing the appointment of a personal representative to the estate, and granting the PR the power and the duty to administer the estate. The priority for appointment of a personal representative is established by 29A-3-203, with top priority to a person determined by a probated will, proceeded by a surviving spouse devisee.

Notice of appointment in informal proceedings is only required when all persons with prior or equal right to appointment have not filed a waiver with the court (29A-3-310). The law requires the PR to furnish written information concerning probate to the decedent’s heirs and devisees upon appointment (29A-3-306). Interested persons may file a demand for notice with the court, which means they will receive notice before probate filings and proceedings (29A-3-204). Otherwise, orders authorizing acts by a personal representative, except as restricted by letters, are not required (Title Standard 15-13).*

The PR is required to give notice to creditors within four months of appointment (29A-3-801). Procedures for handling creditors’ claims are codified at 29A-3-801 et seq. Once appointed, the PR “has the same power over the title to property of the estate that an absolute owner would have, in trust however, for the benefit of the creditors and others interested in the estate,” which “may be exercised without notice, hearing, or order of court.” (29A-3-711).

Transfers of property to a decedent’s devisees or heirs cannot be completed until the applicable taxes and valid claims on the estate have been paid by the PR. The PR may need to sell real property to make payment of claims on the estate, to cover expenses of administration, or to liquidate the estate to facilitate easier distribution. SDCL 29A-3-715 entitles the PR to sell real property and execute deeds of conveyance, unless the decedent’s will or an order in formal probate proceedings restricts such action, subject to the priorities stated in 29A-3-902 (abatement).

South Dakota Title Standard 15-05 further states that a decedent’s property devolves to heirs and devisees, “subject to claims and administration…which includes the authority of the PR to convey.” Conveyances under probate require a duly recorded PR deed or a duly recorded order of complete settlement distributing specifically described real property to heirs or devisees in specified shares to complete the chain of title (Title Standard 15-03).

To transfer title following a sale, the PR executes a deed. When recorded, the deed transfers an estate in fee simple to the grantee with covenants that, at the time of conveyance, the estate is free from encumbrances done, made, or suffered by the grantor, or any person claiming under him, and that, prior to executing the conveyance, the grantor has not conveyed the estate to any other person (43-25-10). Purchasers entering transactions with PRs are protected under 29A-3-714.

In a properly executed PR deed, the grantor is the duly appointed, qualified, and acting PR of the estate. To retitle the property, include the grantee’s name, marital status, address, and vesting information. The deed should reference the decedent, the county of probate, and the case number assigned to the estate by the court.

As with any conveyance of an interest in real property, the deed recites the consideration the grantee is making for the transfer; the full legal description of the subject parcel; and the derivation of title. Any restrictions should be noted on the face of the deed, along with any exemption claimed to the transfer fee imposed by SDCL 43-4-21. Finally, the form must meet all state and local standards for recorded documents. The PR must sign the deed in the presence of a notary public before recording in the Register of Deeds’ office of the relevant county.

After claims on the estate and expenses of administration have been paid, the PR may distribute the estate. The PR executes a deed of distribution “as evidence of the distributee’s title” (29A-3-907). A recorded deed of distribution is “conclusive evidence that the distributee has succeeded to the interest of the decedent…as against all persons interested in the estate,” though the PR may recover assets in the case of improper distribution (SDCL 29A-3-908, Title Standard 15-06). For future purchases of property distributed from an estate, the chain of title is completed by proof of unrestricted letters of the PR in effect on the date of conveyance (Title Standard 15-04).

Apart from meeting all requirements of form and function for documents affecting title to real property, the deed of distribution should identify the classification of the named distributees (either devisees under a will or heirs in an intestate estate), and name each distributee and the percent of the decedent’s interest in the subject property he or she is inheriting, along with each distributee’s address. When two or more heirs or devisees are entitled to distribution, they may petition for partition of property pursuant to 29A-3-911. Distributions from an estate are exempt from transfer fees pursuant to SDCL 43-4-22(10).

South Dakota Probate Related Forms:

The information provided here is not a substitute for legal advice and does not address specific probate situations. Consult an attorney licensed in the State of South Dakota with questions regarding probate deeds and probate procedures in that state, as each situation is unique.

*Title Standards appear as an appendixto SDCL 33-30