What is a Transfer on Death affidavit?

By: Peter R. Certo, Jr. Probate and Estate Planning attorney (State of Ohio)

A transfer on death affidavit, aka TOD, is one of the most useful, and least known, estate planning tools. When the TOD was first authorized by the statute a new deed was prepared and filed. Since then, it is now accomplished via an affidavit, not a deed. Regardless, the common usage is still a TOD "deed".

Most people have heard of joint survivorship, aka J&S, deeds. When two or more people are on a J&S deed, and one dies, the remainder of the titled owners automatically own the property. There is paperwork needed to straighten out the county real estate but the property does not go through probate court proceedings.

The problem with J&S deeds is that each person on the deed is a full current owner of the property. If you want to sell the property you need the consent of the joint owners and they might be entitled to a portion of the sale proceeds. Not only that, but if one of the other owners has debt problems, a divorce, Medicaid qualification, or any of several other issues, your property becomes involved. For example, if I put my child on my house with a J&S deed, and that child has a judgment against him/her, files bankruptcy, or has any other legal complication, my house (now also his/her) becomes involved and subject to that debt. Most folks would not like to see this happen.

In most situations the "transfer on death" deed/affidavit is the best plan. It works similar to making your bank account payable on death designation, or naming someone the beneficiary of an insurance policy. At the time you make the designation the named person has no current ownership or rights in the property. In addition, you have the ability to cancel or change that designation at any time. The TOD works the same way. When the TOD is prepared and filed, the named person only acquires rights to the property upon your death. Until then, you can change the designation, mortgage the property, sell the property, or do whatever you want without consulting or notifying the named beneficiary.

If you are thinking about changing the title on your real estate you should always consult an estate planning or real estate attorney first. The possible complications and the result of making a mistake can cost you your home.