A “Transfer on Death” Deed is a newer way of passing property to heirs besides the traditional will documents. A transfer-on-death deed is created and signed by the property owner, who names the person to receive the property in the deed (the “beneficiary”). Upon the creator’s death, the property is automatically transferred to the beneficiary through the deed documents.
One of the main reasons persons use a transfer on death deed is to avoid the delays and costs associated with the probate process. They are also revocable, meaning that the property holder can cancel the transfer or change the name of the beneficiary at any time before their death. Transfer on death deeds are also called by other names, such as TOD, revocable transfer on death deed, or “beneficiary deed”. They usually involve transfers of real estate like a home or condo.
Transfer on death deeds are not available in all 50 states. Only the following states have laws allowing TOD’s: AZ, AR, CO, HI, IL, IN, KS, MN, MO, MT, NV, NM, ND, OH, OK, OR, and WI.
There are advantages and disadvantages to using a transfer on death deed. Some benefits associated with a transfer on death deed include:
Some of the drawbacks of transfer on death may involve:
Lastly, if the beneficiary dies, their share is terminated and won’t pass on to their heirs. If there are no designated beneficiaries surviving when the owner dies, the property then reverts to probate estate and must be distributed according to probate laws. These issues can be resolved by indicating an alternate beneficiary in the documents (i.e., the person who will inherit the beneficiary’s property interest if the beneficiary becomes deceased).
Transfer on death deeds can be a very useful estate planning tool. It may be necessary to hire a lawyer for help with your transfer on death deed. A qualified attorney can help you draft and review the deed documents so that they fulfill state requirements. Also, your attorney will be able to represent you in court if any conflicts or disputes arise in connection with your property.
Last Modified: 04-13-2012 03:49 PM PDTLaw Library Disclaimer
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