Transfer On Death Deed (TODD)
The Transfer On Death Deed (TODD):
- Is a method of transferring real property to possibly avoid probate
- Is similar to pay-on-death or transfer-on-death accounts at banks or brokerage houses
- Allows you to designate a beneficiary for your property
- Passes the property to your designated beneficiary as a nonprobate asset upon your death
- Must be recorded with the appropriate county during your lifetime to be valid
Your designated beneficiary has no rights to your property during your lifetime. He or she cannot transfer, mortgage or pledge any interest in the property as long as you are alive.
After your death, your designated beneficiary records a death certificate, affidavit of survivorship and clearance certificate (from medical assistance claims and liens) with the appropriate county and the property is transferred to the beneficiary.
If you change your mind about whom you have designated, you can either revoke the TODD or record a new TODD naming a different beneficiary. Like the TODD, the revocation must be recorded prior to your death.
You can name more than one person as a beneficiary; however, the more persons you name, the more difficult it may be to manage the property after your death, negating the usefulness of the TODD.
Using a TODD avoids the disadvantages of using joint tenancy or a life estate deed to transfer property.
A TODD does not avoid estate taxes.
A TODD does not protect the property from creditors. Mortgages or other liens that are attached to the property during your lifetime carry over to the beneficiaries.
A TODD does not protect the property from a medical assistance claim or lien.
Contact me online and I can assist you in evaluating your particular situation and determining if a TODD should be part of your estate plan.