Monday, February 13, 2012

What Is A Transfer on Death Deed?

Regular readers of my blog know that I am devoting the entire month of February to translating legalese into English.  Today's phrase is "transfer on death deed".  It is a deed for real property (home, cottage, vacant lot) that states who should receive the property upon the owner's death.  In plain English that means when the owner dies, it gets transferred to the person(s) listed, and that transfer occurs outside of probate.  It will cost less and occur much faster.

What is the drawback of a TOD Deed?  First, Transfer on Death Deeds are not available in all 50 states.  They came to Wisconsin in 2006, and exist in about a dozen other states (see a previous post for a listing).  TOD Deeds do not allow for contingent planning.  Essentially you cannot say I leave this to Sue, and if Sue predecease me then to Tim.  Finally, TOD Deeds require you to list people.  You cannot list a class of people, such as "my children".

TOD Deeds offer a nice alternative to the traditional living revocable trust, which historically was used to transfer homes outside of probate.  However, TOD Deeds are far less expensive and cumbersome to use.

If this sounds appealing, contact a lawyer in your area to see if the option is a good one for you.  Remember, a blog is just a is not legal advice.

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