When a Deed is Delivered by Escrow at Death

Through a death escrow, the grantor may give a deed to an escrow agent to deliver to the grantee on the condition that the grantor dies. A death escrow is effective as long as two things are true:

  • The only condition is the grantor’s death.

  • The grantor doesn’t retain the legal right to take the deed back out of escrow. Death escrows typically aren’t purchases, but gifts that take the place of wills. So the grantor may give the deed to the agent without telling the grantee about it, and if the grantor asks the agent to give it back, the agent may likely do so.

    But the death escrow is still effective as long as the grantor has no explicit right or power to do so. For example, the death escrow isn’t effective if the grantor puts the deed in a safe deposit box with instructions to an agent to deliver the deed at his death but keeps a key to the box that would enable him to take the deed back before his death.

No matter who the grantor is, he’s certain to die, so the grantor’s conveyance isn’t really conditional. In fact, that’s why courts reason that as soon as the grantor delivers the deed to the escrow agent, the deed is effective to transfer the property interest to the grantee. Of course, the interest isn’t to take effect until the grantor’s death, so it’s a future interest.

Like a normal escrow, the delivery to the escrow agent therefore is the effective date of delivery — not because it relates back, but rather because the delivery to the escrow agent itself completed the delivery of a deed to a future interest.

After the deed is delivered, the grantee must accept it before title is conveyed. Of course, the grantee almost always wants the property. In fact, courts presume that the grantee accepts a deed if the property conveyed is valuable. But if the grantee doesn’t want the property, she may indicate her lack of acceptance in any way she wants and thereby avoid taking ownership of it.

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