Thinking About A Transfer On Death Deed?

There are many benefits of a Transfer On Death Deed (TODD), and it's a tool often used to help keep estates out of probate, as it conveys real property directly to a beneficiary upon the death of the property owners.

While a TODD may allow your estate to avoid probate, it is not a substitute for a Will. A well-crafted Will can allow you to name beneficiaries for the remainder of your estate assets, give specific gifts to individuals and charities, nominate a personal representative (executor) to administer your estate, and nominate conservators and guardians to protect minors who are or might be beneficiaries.

But careful consideration must be given before executing a TODD. If you are contemplating using a TODD, you should ask yourself some questions:

1. Do your children want or need the property, or do they just want cash from the sale of the property? [Chances are, they will want the cash.]
2. Do you want the property to stay in the family? [See #1.]
   
3. Do all of your children get along with one another, especially when money is at stake?
4. Do all of your children and their spouses get along with one another?
5. Do all of your children have funds to pay their share of property taxes, assessments, association dues, property insurance, utilities, repairs and maintenance, and are all of your children willing to pay their share of those expenses?
6. Will your children be able to take time from their busy lives to deal with all those responsibilities listed in #5?
   
7. If one of your children wants to sell their share of the property, will the other child or children have the funds for a buyout?
8. If one of your children wants to sell their share of the property, will the other child or children, and their spouses, be willing to sign the listing agreement, purchase agreement, deed and affidavit of seller?
9. If one of your children wants to sell their share of the property, will the other child or children be comfortable co-owning real estate with someone outside of the family, possibly a stranger?
   
10. Are you aware that if one of your children dies, the spouse, children and/or grandchildren could inherit part of the property?
11. Are you aware that if one of your children gets divorced, the property could become part of the settlement?
12. Are you aware that your children's names will be in the chain of title and if one or more of them has financial troubles, owes back taxes or has judgments, creditors can place liens on the property and force a sale?
13. Are you aware that your children inherit the property along with mortgages, judgments and liens?

A Transfer On Death Deed is a useful tool in your estate plan. However, it is not a one-size-fits-all solution. In some situations, it can cause financial burdens and family conflict later on. No matter whether you choose to use a TODD or not, you still should have a valid Will. 

Discussing your estate planning needs with a qualified attorney can help you make the best choices for your loved ones' future.