Legal Definitions - transfer-on-death deed

A transfer-on-death (TOD) deed is a legal document that allows a property owner to name a beneficiary who will automatically receive ownership of real estate upon the owner's death, without the need for a court process called probate. This type of deed ensures a smooth and direct transfer of property, such as a home or land, to the chosen individual or organization.

The property owner retains full control and ownership of the property during their lifetime, including the right to sell it, mortgage it, or change the beneficiary. Only upon the owner's death does the transfer become effective. The deed can also specify alternate beneficiaries in case the primary beneficiary is no longer living. This is also sometimes referred to as a beneficiary deed.

Here are some examples of how a transfer-on-death deed might be used:

• Example 1: Passing a Family Home to a Child
  Eleanor, a single mother, owns her house outright. She wants her son, Michael, to inherit the house directly after she passes away, avoiding the time and expense of probate. Eleanor executes a transfer-on-death deed, naming Michael as the beneficiary. She records this deed with the county. During her lifetime, Eleanor continues to live in and control her home; she can sell it or change the beneficiary if she wishes. When Eleanor dies, ownership of the house automatically transfers to Michael without needing to go through probate court.

• Example 2: Ensuring a Vacation Property Goes to Grandchildren
  Mark and Susan, a married couple, own a vacation cabin together. They want their two adult children, Lisa and Tom, to inherit the cabin equally after both Mark and Susan have passed away. They also want to ensure that if one child predeceases them, that child's share goes to their respective children (Mark and Susan's grandchildren). Mark and Susan sign a transfer-on-death deed for their cabin, naming Lisa and Tom as co-beneficiaries. The deed also includes a provision stating that if either Lisa or Tom is not alive at the time of the last parent's death, their share will go to their respective children. This ensures the cabin passes directly to their intended heirs without probate, even with a contingency.

• Example 3: Donating Land to a Charity
  Patricia, a retired professor, owns a large undeveloped parcel of land adjacent to a university campus. She wishes to donate this land to the university's endowment fund upon her death to support scholarships. Patricia executes a transfer-on-death deed, designating "State University Endowment Fund" as the beneficiary of her undeveloped land. She records the deed. Patricia continues to own and manage the land during her lifetime. Upon her death, the land automatically transfers to the State University Endowment Fund, fulfilling her philanthropic wish without the university needing to participate in a lengthy probate process.