What is a Transfer on Death Deed, and should I have one? by Jesica Thorson

A Transfer on Death Deed is a document that is recorded at your local county recorder’s office prior to your passing.  This deed automatically transfers property ownership to the named beneficiaries when the owner of the property dies.  The beneficiary listed on the deed can be one individual, multiple people, or a charity. 

The main objective of this type of deed is to avoid probate.  After the property owner passes away, an additional document is filed with the local county recorder’s office to transfer ownership in the county records to the beneficiaries.  While this is a great way to avoid probate, it may not be the best process for your family.  For example, you have five children and only two of them live near you. When you pass away, all five children will be the equal owners of the property.  They will need to agree on how to proceed with the property together.  Will they sell it?  If so, when and for how much?  How will utilities, maintenance and repairs be handled and paid for?  These questions can bring out family issues and put extra strain on the family.  In addition, the distance between your children can create obstacles.  Sometimes, it is better to go through the probate process and designate one personal representative to make these decisions for the family. 

A Transfer on Death Deed may be a great way to pass your property onto your family, but you should consider more than just ease of administration when deciding whether or not to do one.