Everything You Need to Know About Transfer on Death Deeds
If you own property, you may wonder what happens to it after you pass away. In Minnesota, you can use a legal document called a Transfer on Death (TOD) deed to transfer your real estate to a beneficiary of your choosing.
A TOD deed or TODD can be part of your real estate plan and is worth exploring. You may find that a TOD deed is better than a will for your situation. Talking with an attorney is essential to determine if it’s a good choice for you.
How Does a TOD Deed Work in Minnesota?
When Do I Sign a TOD Deed?
You can sign a TOD deed at any point during your life. It’s also completely your choice whether to inform the person you name as a beneficiary. Either way, no real estate is transferred until you die. You’re free to revoke a TOD deed whenever you want and don’t need to inform the named beneficiary of the cancellation.
Who Can I Name as a Beneficiary?
You have the freedom to name any person you want as a beneficiary. This may be your spouse, your adult children, a relative, or a close friend. You can also name multiple beneficiaries in any form of ownership or tenancy.
It’s not recommended to name anyone under 18 as a beneficiary, as an adult will still need to manage the property. If you want to take this route, talk with your attorney to explore your options on how to name an adult to support the minor.
You should also avoid transferring your property to an adult who gets disability or low-income benefits. If your property isn’t handled well, they could lose their government benefits.
When Does a TOD Deed End?
A TOD deed lasts until your death, with only two exceptions. The first exception is if you revoke it during your lifetime. The second is if you sell the property before your death and it expires on its own terms.
What Are the Benefits of a TOD Deed?
A TOD Deed Is Less Complicated
While similar to a living trust, signing a TOD deed requires less paperwork. That means fewer legal and filing expenses, allowing property owners to save money.
A TOD Deed Avoids Probate
Probate is a legal process involving the estate assets of a person who has died. After you die, an attorney typically files documents with a court. These documents must be reviewed and approved by a judge.
This process can take a long time. It can also be expensive and result in a public record of your private finances. If your home is subject to probate and you don’t need estate tax planning, a TOD deed allows you to skip the probate process.
Is a TOD Deed Right for You? Reach Out to Us Today.
Real estate planning can feel overwhelming, but there’s help available. At White & Associates, our estate planning lawyers are knowledgeable and attentive. We’ll walk you through your options and answer your questions with care.
For a free attorney consultation, call us at 763-241-0477 or send us a message.