Transfer on Death Affidavit

What is a Transfer on Death Deed (TODD)?

A “Transfer on Death Deed” is a deed in which the owner of property designates one or more beneficiaries who receive the property at the death of the owner. No new Transfer on Death Deeds are being created at this time. They remain valid to transfer property to beneficiaries.

What is a Transfer on Death Affidavit (TODA)?

A “Transfer on Death Affidavit” is the new method of transferring property outside a will. The owner of property designates a beneficiary who receives the property at the death of the owner.

What are the benefits of either a TODD or a TODA?

  • Current owner retains control. The current owner retains all the rights of ownership and has exclusive control over the property. The owner may do whatever he/she wishes with the property, including changing the designated beneficiary, without seeking permission from the designated beneficiary. You may sell or transfer your real estate without restriction. You do not need the signature of the beneficiary.
  • Avoids probate. With a Transfer on Death Deed or Affidavit, real estate passes automatically to the persons named in the Deed or Affidavit. An affidavit must be recorded along with a Death Certificate with the County Recorder.
  • Protects Your Asset. Your beneficiaries have no present interest in the real estate. Any legal action such as bankruptcy, divorce, lawsuit or judgment filed against a beneficiary will not affect your real estate. Your beneficiary’s creditor cannot place a lien on your property. Your beneficiary will not be able to transfer, mortgage, or pledge his or her interest in your property during your lifetime.
  • Allows a Change of Beneficiary. Beneficiaries listed will have an equal share of the real estate, unless you designate otherwise. If you wish to change the beneficiary of your property or the share they will receive, you may do so without obtaining permission of any past beneficiaries. In other words, you control who you wish to name as beneficiaries and the share they will receive. You can change that designation as you wish.

What It Does Not Do…

Does Not Avoid Estate Tax.

Like any other asset transferring on death, it could be subject to estate tax. However, most legal aid clients will not have to worry about this. Ohio is eliminating estate tax in January 2013. Federal estate tax begins on estates over $5,000,000. There is no tax on gifts to a spouse.

Does Not Protect Your Real Estate From Your Creditors.

Any liens or mortgages created by you or assessed against you during your lifetime will still attach to the real estate and will carry over to your beneficiaries. In other words, this transfer on death designation does not protect your property from your creditors who place liens or mortgages on your property during your lifetime.

Does Not Avoid Inclusion In Determining Medicaid Eligibility.

Your property will be included as your asset in determining your Medicaid eligibility for nursing home care or in-home assistance under Medicaid programs. Your real estate will remain a ‘countable resource’ unless you have a spouse residing in the property or unless you fall under one of the other few exceptions.

  • Does Not Avoid Conflicts Among Beneficiaries. If the relationship among your beneficiaries is not cooperative, there could be expense and time involved in resolving disputes after your death.
  • Does not automatically transfer a beneficiary’s interest to the beneficiary’s heirs. If a beneficiary on a Transfer on Death deed dies before you, that beneficiary’s share may be terminated. It may not pass to his/her heirs.

o If one beneficiary should predecease you, only the surviving beneficiaries will take a share.

o You do have the right to name contingent beneficiaries to indicate who shall take the interest of the deceased beneficiary.

o If no designated beneficiary survives you, the property will become part of your probate estate.

Survivorship Deed vs. Transfer on Death Deed

In the past, the only type of deed that provided an automatic transfer of real estate at the death of an owner was a “Joint and Survivorship” deed. With a survivorship deed, two or more persons owned the property under a deed that contained some type of “survivor” language (for instance, “to John and Mary, jointly with the right of survivorship” or “to John, Mary, and Jane, or the survivor of them.”)

Unlike the Transfer on Death Deed or Transfer on Death Affidavit, each named person in a survivor deed has a present ownership interest in the real estate. Decisions regarding the property must be made jointly by them. Creditors of any of the joint owners could place a lien on the property.

Whether a survivorship deed or a transfer on death affidavit is best for you depends on your personal circumstances. If you are 55 years of age or older, the type of deed you have will have different consequences if you apply for Medicaid to assist with medical care. You are encouraged to speak with an attorney regarding the type of deed that is best for you.

This article is meant to give you general information and not specific legal advice.  Prepared by Community Legal Aid Services, Inc. Updated April, 2012. CE-62-F192-CLAS