Attorney explains Transfer on Death Affidavit (2023)


Most of wait until it's too late to plan for a death when real estate is involved. With this simple form, you can save your heirs lots of frustration, money and time when you pass away and leave your house to them. Ohio attorney, Joe Oldham, explains what you need to do now. If you're looking for a great Realtor, we would love to help you. Penney Real Estate Company


Hey everyone today, uh, we have uh one of my good friends, joe oldham who's, an attorney in akron how's.

It going joe good, excellent, so uh in our in our business I'm going to get right into it because I know everyone's busy, but in our business we see a lot of issues with deeds, especially if someone's trying to sell a house and they've had a spouse recently pass away or, if they're, inheriting a property from a parent where the the parents have passed away, and now the kids are getting it.

We see a lot of issues with estates and probates and people not understanding what to do so.

I wanted to bring you on here, so you could give us a little bit of guidance on the best way to handle things.


So tell me a little bit about yourself, joe, so everyone listening can uh get a good idea of what you're all about my name's joe oldham.

I'm a lawyer.

I've been practicing law in ohio since 1995 office is in uh, akron and um um.

You know that's basically it as far as my occupation and uh.

What what areas of law do you like to focus on? Obviously, some probate? That's why we're talking to you today, but anything else? Well, I've done a lot of probate.

I do a lot of estate planning a lot of real estate work and civil litigation a lot of times.

Probate work really involves helping people not end up in probate, so um.

But if you do, I help with that as well excellent.

So you know when we're dealing with uh the sale of residential, real estate or investment real estate um.

How do I avoid uh a home? How do I avoid probate when we're when we're selling a property well in? In order to, I guess, answer your question: the sale of the property isn't avoiding probate.

It's when people pass away and you've got to transfer that property to whoever their beneficiaries are.

Where you end up in probate, one of the there's a number of ways to avoid going to probate, you can put a property into a trust.

You can put a property into an llc.

You can add, if you would like your children, whoever you want to get the property onto your deed with a survivorship deed, or you can do what's called a transfer on death, affidavit yeah, I've heard of that.

So what? What is a transfer on death affidavit, a transfer on death affidavit is a specific statute in ohio which allows uh someone or a couple to um transfer property to whoever they want, whether it would be a family, a friend, basically anyone you want without going through probate.

It's a document that basically, in a simple form, says I own this property and upon my death.

I want it to go to whoever and it completely avoids going through probate.

Then, when that person dies it just automatically transfers and it's a nice document to have very easy to do and it completely avoids probate, which a lot of times for a lot of families is a really good option.

So if my parents pass away- and I inherit you know- their house is going to go to me and my brother and my sister- if, if they don't, have a transfer on death affidavit, what would what would I be forced to deal with if they don't have a transfer and death affidavit and they pass away? You would have to open an estate in whatever county that they lived in or whoever passed away lives in and it's not, you know a complete disaster, but it costs you a fair amount of money, usually in both court costs and in attorney's fees, and in addition to that, there's a pretty significant delay in getting the property transferred under the probate rules.

You can't just open a probate and immediately transfer a property after somebody passes, because there's timing requirements from probate court for things like creditors to make an appearance or people to contest wills, and so it takes some time and expense right and, if, like in my world as a realtor um and we've brought you in on several occasions where somebody inherits a property, and I use that word loosely but they're supposed to get it and they don't.

You know they don't didn't.

Do anything in advance.

You've had to like prior to covid, it can take weeks, and if you have an offer on a house, that's subject to probate court approval we've seen, deals fall apart because it can't get done quickly enough and the buyer doesn't want to wait around so and now with covet.

I would imagine, is it taking any longer? You know it really is not and the the amount of time it takes to get through.

Probate isn't affected by covid, but it is affected by a number of factors, including like when the person died and how quickly you're opening the estate you know to go through.

All of those timings would take a long time, but it's it can really cause problems in you know getting properties transferred either to sell them or just to get them transferred.

You know to the beneficiaries right so in that same situation, where my parents have passed away and I'm they've got a house that needs to be disposed of, and it's going to my brother, my sister and me um.

If, in that situation, if if they did have a transfer on death affidavit, how would that look to me? In that case it would um sorry, I had a incoming call.

What it is is they would prepare a document um and it says, hey upon our death.

They were alive, correct.

I'm sorry! I said that again prior to their just prior to their demise, you you would have prepared uh, okay, so assuming that was done uh correctly, and now they pass away uh the final one passes away, and we now have this property: that's vacant that we're trying to either sell.

Or what have you if that, if that toda was was properly executed? How does my life look in that situation as the one of the kids? It's very easy, you take the you have to get a death certificate and basically you just file that with the recorder's office and they automatically transfer the property to whoever is listed on the transfer on death affidavit.

It's a really nice document because, first of all, it doesn't give whoever you're giving the property to a current interest.

So if you've got a tod to your son and your son has a divorce or has a medical problem, and has you know creditors, your house isn't at all subject to any of those creditors? He doesn't actually get that house until you pass away and it's also completely revocable.

So if you change your mind, you can you know, give it to someone else or you know, basically, whatever you want at any time, and if you do that, you don't have to get that person to actually sign off on the document.

So it's a it's a very easy document to prepare and file and it can save you.

You know thousands of dollars in months of time in probate court uh.

If you do it, so you don't have to worry that they had like if uh, if you had a a son who or a daughter who you you uh, signed this this or executed this transfer on death, affidavit 4, you don't have to let them know you actually would not have to let them know, but even if you did there, they don't have any interest whatsoever in the property until you were to pass away and and theoretically they could find out after your death like so you don't ever have to worry that, like somehow they're going to speed it along just to get your house, you don't even have to let you don't have to let them know.

Well, if you're that worried, you may not want to give them the property, but that's you're, correct so joe you've been man.

You've been really really helpful, um so for our clients penny real estate company clients, uh.

You mentioned that you had a a special little um uh offer that you'd like to give them in terms of the cost to prepare one of these transfer on deaf affidavits.

What are what are we? Looking at there you're looking at a hundred dollars to put the document together and then it needs to be filed with whatever county you live in the filing fees are around 35 or 40 dollars.

So you know it's it's not a an expensive thing to do.

It's about 150 or under you know, total, and that can save you, like.

I said a few thousand dollars or more in probate, not to mention you know how to yeah and months of delay, and it's not always a document you want for everyone.

There's there may be some circumstances where it doesn't make sense, but for many many many you know parents with adult kids as they get older.

It makes a lot of sense to put that document in place, rather than just rely on a will that by definition, has to go through probate court right.

So you, you might be thinking you're, doing a great thing for your kids by leaving them a paid off house, but unless you take that one extra step so that it's a clear transition from you to them once you've died, then uh it.

You know it could end up being a giant hassle um, and you can just really make it much easier with this transfer on death affidavit in most cases, correct, awesome, well, you've been great today.

Hopefully, everyone uh got some value out of this, and uh have a great day thanks man for coming on all right.

Thank you.


What are the disadvantages of a tod deed? ›

In some states, such as California, multiple beneficiaries on TOD deeds can't inherit unequal property shares, and you can't name a backup beneficiary. In addition, your estate plan may be too complex for a TOD deed if you have multiple children to whom you'd like to pass property.

Is transfer on death a good idea? ›

There seems to be a common misconception that adding a Transfer on Death (TOD) designation (also known as a beneficiary designation) to assets will cure all concerns at death. For the majority of families, this is not an accurate belief. While a TOD may avoid Probate, it does not solve all family concerns at death.

What is the difference between a beneficiary and a transfer on death? ›

If that sounds like too much bother, an even simpler way exists. Transfer-on-death (TOD) arrangements may be used to pass certain assets to designated beneficiaries. A beneficiary form states who will directly inherit the asset at your death.

What happens to a Tod account when the beneficiary dies? ›

If the person you nominated to receive the proceeds dies before you, then the contents of your account are automatically transferred to your estate.

Does TOD avoid estate taxes? ›

No. While naming a TOD beneficiary can help your heirs avoid the probate process, it doesn't confer any tax benefit. It doesn't help you to avoid estate taxes, and your heirs will still have to pay income tax on the earnings of a certificate of deposit (CD) after you pass away.

Is a TOD account considered an inheritance? ›

Are TOD Accounts Taxable to the Beneficiary? While a transfer on death designation can help avoid the probate process, the assets are still subject to applicable estate taxes, capital gains taxes, and inheritance taxes.

Is Tod money taxable? ›

Do You Need to Pay Taxes on a TOD account? Because TODs are considered part of your estate, it may be subject to gift tax, depending on how much money your TOD account holds. If the account holds funds above the federal lifetime gift tax exclusion amount, your estate will likely need to file a tax return.

Can you put a Tod on a bank account? ›

There are various components to titling; one is using a transfer on death (TOD), generally used for investment accounts, or payable on death (POD) designation, used for bank accounts, which acts as a beneficiary designation to whom the account assets are to pass when the owner dies.

What happens to a mortgage on a Tod? ›

Beneficiaries have no ownership claim to your property while you're still alive. You maintain full control of the property, including responsibility for any mortgage debt, taxes, liens and the like. Once you pass away, the property will transfer to your named beneficiary, along with any debts attached to it.

What states allow Tod accounts? ›

Currently, TOD deeds (or similar alternatives) are offered in 27 states and the District of Columbia: Alaska, Arizona, Arkansas, California, Colorado, Hawaii, Illinois, Indiana, Kansas, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas, Virginia, ...

Does a beneficiary override an estate? ›

Typically, a beneficiary designation overrides a Will. For example, let's say that you wrote in your will that you want everything to be left to your spouse. You have a retirement savings account, for which you designated your two children as your beneficiaries.

What happens to bank account when someone dies without beneficiary or will? ›

If you haven't named a beneficiary for a specific bank account that account will transfer through the ordinary estate and probate process when you die. Estate planning can be complicated and difficult if you go about it on your own.

What is TOD rules? ›

TOD (Transfer-on-death) refers to named beneficiaries receiving assets at the death of the property owner without the need for probate, facilitating the executor's disposition of the property owner's assets after his or her death. This is often accomplished through a TOD deed.

Is a TOD better than a trust? ›

TOD Deed Pros:

TOD deeds are usually less expensive than living trusts. This is because they are much simpler to set up. Easier to revoke or make changes to.

Can the owner take money out of a TOD account? ›

During your lifetime, you retain full ownership and control of assets in a TOD account. You can manage the investments as you see fit, make additions or withdrawals, and move or close the account if you wish.

What happens to a mortgage on a TOD? ›

Beneficiaries have no ownership claim to your property while you're still alive. You maintain full control of the property, including responsibility for any mortgage debt, taxes, liens and the like. Once you pass away, the property will transfer to your named beneficiary, along with any debts attached to it.

Is TOD money taxable? ›

TOD Accounts and Debt

Creditors can still go after assets in a TOD account. TOD accounts are also subject to inheritance tax and capital gains tax, as well as taxes on withdrawals from pre-tax investments including IRAs and 401(k) plans.

What are the disadvantages of a payable on death account? ›

Another con is that you can't change the beneficiary of a POD account once you name someone. So if they pass away before you do and there are no other beneficiaries named to follow after them, the account would be subject to the normal probate process.

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