How to Prepare a Transfer-on-Death Deed

The easiest way to avoid probate for real estate.

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If you want to use a transfer-on-death deed to leave real estate, you must prepare a deed that meets your state's requirements. If your deed doesn't contain the right language, isn't formatted in the correct way, or isn't notarized properly, it won't work. A deed is a simple, one-page document, and it isn't hard to get it right—you just have to pay close attention to your state's requirements.

Get a Deed Form or Prepare Your Own

You can buy a state-specific TOD deed form for your state at www.nolo.com or type up your own docu­ment. Be sure any form you use meets the requirements of your state's TOD deed statute. Many of these statutes specify just what language the deed must contain. You can find the most recent version of your state's statute online, using the citation given above. Start at www.nolo.com/legal-research/state-law.html.

You must also format the deed so that it will be acceptable for record­ing in the local land records office. For example, you'll have to leave a certain amount of space at the top of the page for the recording infor­mation that the clerk will add to the document. You can find out all the requirements from the recording office ahead of time.

Name the Beneficiary

You can name anyone you please to inherit your real estate—a person, more than one person, or an organization such as a favorite charity. Your choice is called the "grantee-beneficiary" in most states. You can also name an alternate beneficiary, commonly called a "successor grantee-beneficiary."

Name each beneficiary specifically; don't use categories such as "my nieces and nephews." If you want to leave your house to your two children, put their names on the deed--for example, "Robert P. Wyman and Rosamund M. Wyman,"--not "my children." In some states a deed left to a category of beneficiaries simply isn't valid; in others, it will be confusing at best.

If you name more than one beneficiary, choose how they will take title to the property. For example, you may want to leave it to them "as joint tenants," meaning that when one dies, the surviving co-owners will automatically own the property. But each state has its own options—for example, a few states don't recognize the term "joint tenants." You'll need to find out what your choices are, and their pros and cons. If the beneficiaries want a different arrangement, they can change the way they hold title once they own the property.

Describe the Property

Copy the exact description of the property—carefully—from your current deed. Then check it over at least once.

Sign the Deed

If you own the property alone, you're probably the only person who needs to sign the deed. There's one exception: If you live in a community property state, both you and your spouse should sign the deed, just to make it clear that your spouse doesn't object.

If you think your spouse might revoke the deed later, see a lawyer. If you have any reason to think that if you died first, your spouse would claim ownership of the property and revoke the transfer-on-death deed, frustrating your wish to have it go to the TOD beneficiary, see a lawyer before you prepare a TOD deed.

If you own the property with someone else, you should both sign the deed. The TOD deed will not take effect until the last surviving owner dies.

EXAMPLE: Jack and Maureen own their house together as joint tenants, which means that when one of them dies, the survivor will automatically own the property. They sign and record a TOD deed, leaving the property to their adult son Ryan at their death. After Jack dies, Maureen owns the property alone. At her death, it goes to Ryan.

If only one co-owner signs a TOD deed, it will have no effect unless that co-owner is the last surviving owner.

You must sign the deed in front of a notary public. That means you need a notarization statement (commonly called an "acknowledgment") at the bottom of the deed, which the notary will fill in and sign. Some states require that witnesses watch you sign and then sign the deed themselves.

Record the Deed

Your deed won't be effective unless you recorded (filed) it in the local public records before your death. To get that done, take the signed deed to the land records office for the county in which the real estate is located. This office is commonly called the county recorder, land registry, or registrar of deeds. If you aren't sure, call the courthouse and ask where to record real estate deeds.

You'll have to pay a small fee for recording. The clerk will stamp some recording information on the deed, make a copy for the public records, and return the original to you. 

by: , J.D.

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