Alaska is the latest state to recognize deeds that transfer ownership of real estate after death without the need for probate.
Dubbed “transfer on death deeds” (or “TOD deeds” for short) in some states, or “beneficiary deeds” in others, the list of U.S. jurisdictions that accept this type of deed through state legislation has grown to 25:
- District of Columbia
- New Mexico
- North Dakota
- South Dakota
- West Virginia
Aside from this, three states – Florida, Michigan, and Texas – recognize “enhanced life estate deeds,” also known as “Lady Bird deeds,” under state common law, which in essence accomplish the same thing as TOD deeds.
How Does a TOD Deed Work?
How does a TOD deed work? While the logistics vary from state to state, in general the owner of the real estate will sign a new deed which lists the beneficiaries who will inherit the property after the owner dies. The new deed is then recorded in the applicable public land records (this is usually done at the court house of the county where the real estate is located and costs between $10 and $50). Then, after the owner dies, their death certificate is recorded in those same public land records, and voilà, the beneficiaries named in the deed become the new owners of the property.
What happens if the owner decides they want to change the beneficiaries of the property after the new deed is recorded? Then the owner will have to sign and record another TOD deed.
Is a TOD Deed Right for You and Your Family?
While the use of a TOD deed to avoid probate may appear to be a simple process, it is certainly not a “one-size-fits-all” solution to avoid probate and it is certainly not something you should attempt to do on your own because there are so many things that can go wrong.
If you are interested in using a TOD type of deed to avoid probate of your real estate after you die, then consult with an estate planning attorney in the state where your real estate is located to determine if this is the right solution for you and your family.
- What is Probate?
- When is Probate Necessary?
- How Much Does Probate Cost?
- How Long Does Probate Take?
- 4 Ways to Avoid Probate
- How to Use a TOD Deed to Avoid Probate
- Avoiding Probate by Adding Your Children to Your Deed – Good or Bad Idea?
Photo: Aerial view of Aghileen Pinnacles, Lefthand Valley, Wilderness Area, Alaska; U.S. Fish and Wildlife Service