Transfer on Death Deeds are a underused tool to bequeath real estate to loved ones after your death. They are simple and inexpensive to create, and they will generally save your surviving family significant time and expense.
What Does a Transfer on Death Deed Do?
A Transfer on Death Deed (officially called a “Designation of TOD Beneficiary”) transfers ownership of real estate to a person or people of your choice after your death, without needing to go through Probate. This means that your loved ones do not have to wait for the probate process to conclude, and it means your estate will not have to pay the 0.2% Probate Inventory Fee when transferring the property. If you have created a TOD Deed for your property, this means that you do not need a Will or Trust to transfer this particular asset.
The Designation of a TOD beneficiary does not affect ownership until after the death of the owner, or after the death of the last to die of multiple owners. As long as at least one owner is still alive, the TOD Deed can be amended or revoked at any time. If the property is sold prior to the owner’s death, the TOD Deed automatically becomes invalid.
Who Can Use a Transfer on Death Deed?
TOD Deeds can be used for almost any Wisconsin real estate. If used on Jointly-owned real estate, such as a home owned by a married couple, the TOD Deed goes into effect upon the death of the second spouse. As of April 18, 2018, TOD Deeds can now also be used to transfer fractional interests such as property owned as Tenants in Common.
To Whom Can You Give Property Using a TOD Deed?
You can give property to either a single person, or multiple people. If you give to multiple people, you will need to designate whether the recipients own the property as Joint Tenants (where they all own the entire property), or as Tenants in Common (where they each own a specific percentage of the value of the property.
In addition, as of April 18, 2018, you may also designate one or more people as contingent beneficiaries, in case a primary beneficiary does not survive the owner.
What Are the Limitations of a Transfer on Death Deed?
A Transfer on Death Deed will not be the solution for all families. TOD Deeds should not be used when any of the beneficiaries are minors. They should also not be used when multiple beneficiaries may not get along or may not agree on how to use the property.
Transferring real estate with a TOD Deed does not escape creditors of the decedent. This also does not prevent Wisconsin Estate Recovery from pursuing reimbursement for Medicaid or long-term care payments made during the lifetime of the decedent.
To see if a Transfer on Death Deed is right for you, and to request assistance drafting and recording the Deed, contact Lippow Law Offices, LLC for a free consultation.