What is a Transfer on Death Deed?

A Transfer on Death Deed (“TODD”) allows you to name a beneficiary, or more than one beneficiary, to inherit your real property at your death.  A TODD is recorded on the title to your real property and becomes effective immediately at your death to transfer the title to a named beneficiary.  

At your death, the named beneficiary records an Affidavit of Termination of Owner’s Interest, which serves as notice that title is now vested in the name of the beneficiary.  With a TODD, your real property becomes a non-probate asset, meaning the title passes to the named beneficiary without the need for a probate at your death (much like a retirement account or life insurance).  This is attractive to many people.

A TODD may be useful when you want to pass your house to your only child, an adult child who wants to continue living there after your death, or one or two adult children who get along well and plan to use the real property as an investment rental together.  A TODD is also useful for transferring your property to your trust at your death.    

We sometimes caution against using a TODD when transferring your property to more than two or three children, or any number of children who don’t get along with each other.  The concern is that the beneficiaries become joint owners of the property at your death, so they should be able to work together amicably to use the property, rent the property, or sell the property.  Additionally, a TODD may not be as useful if the beneficiaries plan to sell the property right away because title insurance companies are sometimes hesitant to insure title to the property when TODD is used in such a case.  

Our Estate Planning attorneys can help you assess whether a TODD makes sense for you, and help you plan around any issues with using a TODD. Contact us today to learn more!

About Amy Scott Smith

Amy is a native of Montana, and an active member and supporter of the Missoula Community with a family of her own. Her personal experiences help her provide perspective and guidance to clients with businesses and families across Montana.

For a number of years, Amy’s general practice included litigating real property issues and contract disputes, as well as family law, before she focused her practice primarily to estate planning, trusts, probate, and transactional work. Her diverse general practice experience has provided a solid background and unique perspective that Amy applies in drafting comprehensive estate plans and contracts that will stand the test of time, as well as effectively resolving family disputes in probates.

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