A transfer on death deed (aka TOD or TODD) can be used to name a beneficiary for your real estate upon your death. You, as the owner, retain full ownership and responsibility for the property, including paying property taxes and filing for any applicable exemptions. The actual transfer of ownership is not completed until the owner’s passing. The deed must name the beneficiary, after all, that is the reason for doing the deed. It must still be properly recorded in the county where the real estate is located. The deed can be revoked or changed at any time prior to the owner’s passing.
If the property is sold before the owner’s death, then the beneficiary has no future rights to the property even if a valid TOD was recorded. It is the same as in a Will or any other deed, only what is owned can be conveyed or transferred, and when the owner sells the land they cannot also convey it to a beneficiary as they no longer retain ownership. Another consideration is when the property is held jointly such as tenants in the entirety, then both owners must convey the property to the same beneficiary, otherwise, the TOD is void.
By way of the automatic transfer upon death, the property is no longer part of the deceased’s estate. Using this type of deed can be beneficial in eliminating the need to open an estate and go through the probate process. In general, you must open an estate and go through probate if the value of the estate is $50,000 or more. If you are interested in discussing the possible benefits a transfer on death deed may be to your estate plan, please contact Perry Law Office for a free consultation.