Spotlight On: Transfer On Death Deeds

The Indiana legislature did a huge favor to all Hoosiers last year when it expanded the state's transfer-on-death (TOD) laws. It has been possible for a long time to designate beneficiaries for assets like bank accounts and investments, but this new law goes even further. Now it's possible to designate a TOD beneficiary for almost any asset, including real estate.

The process for designating a TOD beneficiary for a home or land is quite simple. A person simply signs a Transfer on Death Deed describing the property and naming the beneficiary. If desired, contingent beneficiaries can also be named in case the primary beneficiary dies prior to the owner. The deed must be recorded at the county recorder's office in order for the beneficiary designation to take effect.

The owner can revoke the TOD deed at any time prior to death. Also, because the deed does not convey title to the beneficiary, the owner is free to sell, mortgage, lease or otherwise deal with the property as though the beneficiary designation had never been made. Unless revoked, the TOD designation will override any gift of the property in the owner's will and the property will pass automatically to the beneficiary upon the owner's death.

TOD deeds should be considered by anyone owning real estate. They are a simple, inexpensive way to leave real estate to a loved one without incurring the legal costs of probate. It is also an alternative to the standard living trust arrangement for probate avoidance at death.