A transfer on death deed (TODD) allows property owners in Ohio, and certain other states, to pass real estate directly to a designated beneficiary upon their death. This estate planning tool can help you avoid probate, and thereby save on time and money. To help protect your assets, talk to a financial advisor.
What Is a Transfer on Death Deed?
A transfer on death deed (TODD) is a legal instrument that permits property owners to designate a beneficiary to receive the title to a property upon the owner’s death. This can help your estate circumvent the need for probate court procedures. Unlike warranty or quitclaim deeds, which transfer ownership immediately upon execution, a TODD allows the owner to retain full control and ownership of the property during their lifetime, with the ability to sell, mortgage, or transfer it without restriction.
In several states, including Ohio, TODDs are commonly used in estate planning strategies to transfer many types of real estate, including single-family residences, condominium units and selected farmlands. Though you should note that TODDs cannot be used for a property held in joint tenancy or as tenants by the entirety.
Benefits of Filing a Transfer on Death Deed in Ohio
In Ohio, a transfer on death deed offers a potential advantage: avoidance of the probate process. Traditionally, when a property owner passes away, their estate undergoes probate — a judicial procedure where assets are allocated as per the will or state law. A TODD, when executed correctly, enables the immediate transfer of property to a designated beneficiary, bypassing this often protracted and expensive legal process.
Moreover, TODDs confer substantial control and flexibility to property owners in Ohio. A TODD is revocable, allowing it to be amended at any time during the owner’s life, provided they possess the mental capacity to do so.
Circumstances and intentions are subject to change, and a TODD can be altered to reflect these changes. Additionally, because the transfer of ownership is deferred until death, the owner retains the ability to use, lease or dispose of the property freely during their lifetime.
Requirements for a Transfer on Death Deed to be Valid in Ohio
To ensure that a transfer on death deed is legally binding in Ohio, it must meet certain prerequisites. Here are three basic steps for it to be legally recognized in Ohio:
- The deed must be properly executed, which involves the property owner signing the document in the presence of a notary public.
- It must contain an explicit statement of the owner’s intent to transfer the property upon their death, provide a legal description of the property, and name the beneficiary clearly.
- The deed must be recorded with the county recorder in the county where the property is located before the owner’s demise.
While following these steps is essential, it’s important to note that it does not guarantee the absence of legal challenges or other estate issues. You may want to consult with an attorney to make sure that your deed is valid.
Bottom Line
A TODD can be a valuable estate planning tool in Ohio that can be used to distribute property directly to designated beneficiaries upon the owner’s death. This can help the estate avoid probate, while the owner maintains control of the property during their lifetime and provides flexibility to change beneficiaries as circumstances change.
Tips for Financial Planning
- A financial advisor can help you build a long-term plan and manage your finances. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- One important piece of financial planning is retirement. You can use a free retirement calculator to estimate how much you should be saving.
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