What is a transfer on death deed (TODD)?
A transfer on death deed (TODD) is not a Will. A TODD is a deed that has the legal effect of transferring real property (land, everything permanently attached to it, and all of the interests, benefits, and rights inherent to the ownership of real estate) upon the death of the grantor/owner.
If a decedent (a person that is no longer living) has a TODD, probate is not necessary because the terms of the deed are honored and legitimized without the court’s involvement. This means that the real property is automatically given to the named beneficiary upon the owner’s death.
Is having a TODD better than having a Will?
No. A TODD only transfers real property and will not transfer personal property (i.e. clothes, cars, furniture, money, and other personal belongings).
Can I have both a TODD and a Will?
Yes. TODDs are good for people that only have real property or very little personal property. Attorneys will charge less for TODDs than Wills, because Wills take more time to draft.
Should I draft a TODD without an experienced attorney?
No. TODDs are ineffective if they are drafted and executed incorrectly. Additionally, many TODDs are set aside because of an inaccurate legal description of the property, the failure to have the document properly notarized, or the failure to properly record the documents.
Can I list more than one beneficiary on the TODD?
Yes. You can list two beneficiaries. You can also list a preferred beneficiary and a secondary beneficiary, who only takes title to the property only if certain conditions are met.
What will happen if I have a TODD and I want to sell the property?
You can sell the property normally without revoking the TODD. The TODD will become invalid once you sell the property.
When is a TODD not recommended?
A TODD is not recommended for someone that has a lot of personal property. Also, it is not recommended for taxable estates over $5.45 million.
How do I cancel or revoke a TODD?
You cannot cancel or revoke a TODD by destroying it. However, you can render a TODD void by recording a subsequent TODD or conveying (selling the property) after the TODD is filed/recorded.
Can I create a TODD even if I own the property with someone else?
Yes, you can create a TODD. However, you can only transfer what you legally own. For example, if you are married and you purchased the home with your spouse, you can only transfer 50% of your undivided interest in the real property.
What if I create a TODD and I have an existing mortgage?
The person you list as a beneficiary will take the property, but the property will still be subject to all mortgages, liens, and claims from creditors.
I have a Power of Attorney (POA). Can I draft a TODD?
No, a person with a Durable Power of Attorney (POA) cannot create a TODD on behalf of someone else. Only the original real property owner can create a TODD.
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