Everything You Need to Know About Transfer on Death Deeds

58 O.S. Section 1251 to 1258 is one of the best ways to easily protect your real estate assets. Named the Nontestamentary Transfer of Property Act, these series of statutes allow the use of a Transfer-on-Death Deed (or “TODD”). A TODD is a special type of deed that has no legal effect until the death of the grantor. Now, you might be thinking: “well why is this such a good idea if it does not do anything?”

One of the main goals of estate planning is to avoid probate, or the process of distributing assets in court. Obviously, since it involves a court system, Probate is an expensive and time-consuming process for your descendants. However, Probate is only required if the deceased died with assets. Nothing to distribute means no probate.

That is where the TODD comes in. The moment of death, the property is conveyed away and thus, there is no need to probate it. However! There are a couple of requirements one needs to follow to ensure a proper TODD transfer:

(1) The TODD should follow the statutory form found here . You will note that it must be executed by the owner and that owner needs to be competent with legal capacity. Further, there must be witnesses and a notary as well.

(2) The executed TODD needs to be filed of record (with the County Clerk where the property is located) prior to the death of the owner.

(3) Once that is completed, and the owner is now deceased, the beneficiary (or grantee) of the TODD must file an affidavit accepting the transfer within nine (9) months of the grantor’s death. This affidavit must include (1) a verification of the record owners death (& a death certificate); (2) whether the record owner and beneficiary were married at the time of death; and (3) a legal description of the property (not a mailing address).

So, once you have a TODD executed and filed, what happens if you want to change the beneficiary? First, you need to know that executing a new will conveying the same property DOES NOT revoke the prior TODD. You need to either (a) execute a new TODD to change a beneficiary or (b) executing and filing an instrument that revokes the prior designation (deed to someone else or a notarized affidavit etc).

Now, as a warning, there is also a gray area of law here involving fraud conveyances. If the TODD is executed with an actual intent to avoid creditors or if the estate becomes insolvent as a result of the TODD; a creditor of the now deceased owner may be able to invalidate the deed.

If you need help considering your estate plan, please give HH Legal a call. We provide free phone consultations to make sure you are pointed in the right direction.