What is a TOD Deed? by Daniel K. Leininger

TOD Deed stands for “Transfer on Death Deed.”   The owner of real estate can have his/her attorney prepare a “Transfer on Death Deed” which names the beneficiaries who are to receive ownership of the real estate after the death of the owner.  The owner signs the Transfer on Death Deed and it is recorded in the county recorder’s office in the county where the real estate is located.  Once recorded, the owner is still free to do what he/she pleases with the real estate:  mortgage it for a loan, sell it, or transfer it in any way, all without the consent or even knowledge of the “Transfer on Death” beneficiaries.  If the owner owns the real estate at his/her death, then all the “Transfer on Death” beneficiaries need do is file with the recorder’s office an affidavit with the death certificate documenting the owner’s death, and the county records are changed to reflect the “Transfer on Death” beneficiaries as the new owners of the real estate.  Again, the great value is that the transfer of title to the real estate can be made to the “Transfer on Death” beneficiaries as soon as possible after the owner’s death and without the delay and expense of probate.

Spouses can together sign and record a “Transfer on Death” deed naming their children as the “Transfer on Death” beneficiaries.  Upon the death of one spouse, there are still no restrictions on the surviving spouse’s ability to deal with the real estate.  The surviving spouse can mortgage, sell, or otherwise transfer the real estate without the knowledge or consent of the “transfer on death” beneficiaries. 

Once a transfer on death deed is signed and recorded, the owner(s) can make any changes they want to the “transfer on death” beneficiaries.  To do so, all the owner(s) need to do is sign and record a new transfer on death deed with the changes.  With respect to married couples, the surviving spouse can also change the transfer on death beneficiaries. 

The “Transfer on Death Deed” is a very valuable estate planning tool.   Transfer on death deeds are relatively inexpensive but may result in huge savings in both time and money by the avoidance of probate.