Sheils v. Wright
51 Kan. App. 2d 814, 357 P.3d 294, 2015 Kan. App. Unpub. LEXIS 680 (2015)
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Rule of Law:
A property owner who has executed a transfer-on-death (TOD) deed retains the absolute power to convey the property during their lifetime. A subsequent lifetime conveyance, such as creating a joint tenancy, takes precedence over the TOD deed, even if the subsequent deed is not recorded before the owner's death.
Facts:
- In 2010, Richard Sheils executed and recorded a transfer-on-death (TOD) deed for his house, naming his brother, Charles Sheils, as the beneficiary.
- On July 12, 2013, Richard signed a quitclaim deed for the same property, transferring it to himself and his nephew, Kevin Wright, as joint tenants with the right of survivorship.
- On that same day, Richard delivered the signed quitclaim deed to his attorney with instructions to record it.
- Richard died on September 6, 2013.
- The quitclaim deed creating the joint tenancy was recorded on September 20, 2013, fourteen days after Richard's death.
Procedural Posture:
- Charles Sheils filed suit against Kevin Wright in district court, seeking to quiet title to the property.
- Kevin Wright filed a counterclaim asserting his ownership.
- Both parties filed cross-motions for summary judgment.
- The district court granted summary judgment in favor of Charles Sheils, holding that the transfer-on-death deed controlled.
- Kevin Wright (appellant) appealed the district court's judgment to the Kansas Court of Appeals.
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Issue:
Does a lifetime conveyance of property by a quitclaim deed creating a joint tenancy extinguish the interest of a beneficiary under a previously executed and recorded transfer-on-death deed for the same property, even if the quitclaim deed is not recorded until after the owner's death?
Opinions:
Majority - Leben, J.
Yes. A lifetime conveyance creating a joint tenancy extinguishes the interest of a beneficiary under a prior TOD deed. The court reasoned that under Kansas statute K.S.A. 59-3504(b), a beneficiary of a TOD deed takes the property 'subject to all conveyances' made by the owner during their lifetime. Richard's execution and delivery of the quitclaim deed to his attorney constituted an effective lifetime conveyance that created a valid joint tenancy with Kevin. Upon Richard's death, his interest was automatically extinguished by the right of survivorship, and full ownership passed to Kevin as the surviving joint tenant. Consequently, at the moment of Richard's death, there was no property interest left for the TOD deed to transfer to Charles. The failure to record the quitclaim deed before Richard's death did not invalidate the conveyance as between the parties or as against Charles, who was merely a beneficiary and not a subsequent bona fide purchaser for value.
Analysis:
This decision clarifies the hierarchy between competing non-probate transfers of real property, establishing that a transfer-on-death deed is fully subject to the owner's subsequent actions during their lifetime. It solidifies the principle that a TOD deed is an ambulatory instrument that does not vest any rights in the beneficiary until the owner's death and only operates on whatever property the owner actually holds at that moment. The ruling reinforces that the key element for a deed's effectiveness is delivery, not recordation, thereby prioritizing the owner's final dispositive act over a prior, revocable designation.
