When planning your estate, you should take steps to keep your real estate. While a living trust may help you keep your estate out of probate, many people prefer transfer on death deeds (TODD). Here are some of the questions you should ask your probate law attorney.
What Is a Transfer on Death Deed?
A TODD helps you transfer the ownership of real estate when you die. If you neither have a TODD or will, your real estate will pass through probate court. Probate is expensive and lengthy and may not fulfill your death wishes.
With a transfer on death deed, you get to keep the ownership rights to your property. When you pass away, your property goes to the person named in the TODD without any probate action. You can have more than one beneficiary and change the beneficiary by canceling the TODD or creating a new one. If you're the joint owner of a real estate property, you can transfer ownership to a joint owner or non-owner by naming them as beneficiaries.
How to Revoke a TOD Deed?
There are three ways of revoking a TOD deed. First, you can complete a revocation form and record it in the state where the property is located. Alternatively, you can complete a new TOD deed and record it in the state where the property is located. Lastly, you can transfer the real estate to someone else while you're still alive through a recorded deed. The recorded deed revokes the TOD deed.
When Should You Use a TOD Deed?
Using the transfer on death deed helps you avoid probate for your loved ones and beneficiaries. It's also helpful if you have real estate in other states and wish to avoid ancillary probate. However, a TODD may not be suitable for specific situations.
One of the disadvantages of a TODD is that it doesn't come with a title warranty. Therefore, a TOD deed doesn't come with the guarantee that the transferor owns the property. In case of ownership issues, your beneficiary may not be able to claim the property. Additionally, a TODD doesn't offer protection against estate creditors. In such cases, you might need an irrevocable trust.
A transfer on death deed is a smart tool when planning your estate. To get the best out of this tool, research the estate planning laws in your state. For example, a few states allow transfer on death deeds. These include Alaska, California, Kansas, Virginia, and Washington. Seek the counsel of a probate attorney for guidance on whether or not a transfer on death deed will work for you.Share