An important step in owning real estate is creating a living trust because this avoids any issues among relatives after death. Too many families are dealing with strife and division because a living trust was never set up. Many people skip this important step in life because it can be scary, expensive, and time-consuming. However, there are options for homeowners. Transfer-on-Death deeds allow property owners to transfer real estate without going through the probate process. This deed provides an inexpensive and simple way to transfer real property to a beneficiary.
Important factors when deciding to record a revocable Transfer-on-Death deed:
The real property must fall under one of these criteria: a condominium or single-family home, a single-family residence on less than 40 acres of agricultural land, or a multiple residence of less than four residential dwelling units.
A transferor must use the services of a notary public to sign and date a revocable TOD deed.
The TOD deed must be recorded within 60 days from the date it was signed.
The transferor has the right to revoke the TOD deed at any time.
The beneficiary needs to know that the property is subject to involuntary liens recorded by the owner's creditors. Upon the owner's death, the liens transfer with the property to the beneficiary.
Speak to a lawyer about your estate plan before you take advantage of a TOD deed. New laws took effect in 2022 to avoid issues with the process.
If you find yourself in need of a TOD deed, talk to a lawyer about your estate plan first.
However, it is best to spend the time and money to set up a living trust.
Top 3 Reasons a Living Trust is Best:
- Avoid Probate - A living trust means no probate is necessary to pass your property on to your beneficiaries if you die or become incompetent.
- Control - You decide what will happen to your property after you die. A trust also allows you to control how your beneficiaries spend the inheritance.
- Tax Planning - A living trust can help reduce and sometimes avoid taxes. Talk to an attorney that specializes in living trusts for more information.
If you are interested in a TOD deed or Living Trust, contact an attorney who specializes in estate planning.