You asked for our opinion on whether the quitclaim deed from Ina S~ to LeRoy and Audrey
S~ created a valid life estate for Ina S~. For the reasons set out below, we believe
that the deed did in fact create a valid life estate.
Ina S~ owned property in Hoffman, Minnesota. Since 1982, her two children have held
a mortgage against the property. On that date, Ina S~ signed a promissory note for
the amount of $10,744 at twelve percent interest per annum compounded annually from
and after January 1, 1980. As of 1997, Ms. S~ owed over $40,000 on this note. Recovery
upon default is at the option of the legal holder of the note.
On October 21, 1992, Ina S~ executed an individual to individual quitclaim deed which
purported to grant her interest in the said property to LeRoy and Audrey S~. However,
Ina reserved a life estate in and to the real estate. The total consideration paid
for the transfer of that property was less than $500.
The deed which Ina S~ executed comported almost exactly with the Minnesota form 27-M,
for individual to individual quitclaim deeds. Minn. Stat. Ann. § 507.45. The only
noticeable difference is that Ina S~' deed includes a statement in the description
of the property which reserves a life estate in and to the real estate for Ms. S~.
The deed was recorded with the county on October 21, 1992, as Minnesota state law
requires. Minn. Stat. Ann. § 507.34 (1997).
It is a well-settled rule that if a deed is not testamentary in character, and passes
a present interest in the property even though possession and enjoyment of the fee
is postponed, the grantor may reserve in himself a life estate in which the fee is
granted. 28 AM. JUR. 2D, Estates § 67 (1966). A deed that reserves a life estate in
the grantor is not testamentary so long as the grantor retains no right to recall
or control its destiny. Hagen v. Hagen, 161 N.W. 380 (Minn. 1917). According to the deed here, Ina S~ had no right to recall
or control the property's destiny. Therefore, the deed is not testamentary and may
reserve a valid life estate.
As mentioned, the insertion of the life estate reservation deviates from the form
found in the annotated Minnesota statutes. However, this clause should still be considered
valid. Nothing in Minnesota law suggests that a quitclaim deed cannot reserve a life
estate in the grantor. So long as the intent of the grantor is plainly manifest in
some part of the conveying instrument, the creation of a life estate will be upheld.
28 American Jurisprudence Second, Estates § 64 (1966); First & American Nat. Bank of Duluth et al. v. Higgins et al., 293 N.W. 585, 590 (Minn. 1940). As the deed says "reserving to the grantor, Ina
S~, a life estate in and to the real estate," the grantor's intentions are certainly
clear. Ina S~, therefore, validly reserved a life estate.
There appears to have been some question as to whether Ina S~' mortgage obligation
still exists, since the owners of the mortgage now are the owners of the property
mortgaged, thus possibly causing a merger of the smaller interest (mortgage) with
the larger interest (title). No merger occurred here. Since the holders of the mortgage
have calculated how much is owed to them through 1997, and since the deed was done
in August of 1992, it can probably be assumed that they did not intend to have their
mortgage interest merge with the ownership of the property. "Where a merger would
frustrate the interests of the party holding both estates and that party's intent
regarding merger has not been expressed, merger will not be presumed to occur." Resolution Trust Corporation v. Independent Mortgage Services, 519 N.W.2d 478, 482 (Minn. App. 1994). We are unaware of any evidence that the holders
of the mortgage (apparently Ms. S~' children) intended to give up their mortgage interest.
Therefore, their mortgage interest would appear to be fully enforceable, and continued
to apply against the life estate.
For the foregoing reasons, we conclude that a valid life estate was created by Ina
S~' quit claim deed.
Thomas W. C~
Charles A. C~