For many Americans, the largest asset possessed at time of death is real estate. When it comes to your estate plan, one way to transfer real estate, whether land, a house, or both, is through a bequest by will. Real estate can also be transfer through use of a trust. Indiana and Ohio offer an alternative option for those who wish to gift their real estate to specific individuals at the time of their death. This alternative option utilizes a Transfer on Death Deed and allows owners of real estate to transfer their property outside of the probate process.
The real estate transfer on death option works much like the transfer on death or payable on death designations that banks and financial institutions utilize for the transfer of financial assets after death. By executing and recording a Transfer on Death Deed, the owner of real estate, called the "grantor," can seamlessly transfer his or her real estate to a named beneficiary or multiple beneficiaries at the time of the grantor's death. During his or her lifetime, the grantor retains ownership of the real estate. Upon the death of the grantor, ownership of the property can be transferred quickly by simply recording an Affidavit of Death with the recorder of the county in which the real estate is located.
Designating a transfer on death beneficiary may seem a bit confusing. Here are a few helpful facts about the transfer on death option for real estate transfers:
1. After executing and recording a Transfer on Death Deed, the grantor retains full ownership of the property. This means that the grantor is not subject to eviction by the beneficiary, and the grantor maintains his or her homestead exemption during the life of the grantor.
2. The grantor can still mortgage or sell the real estate during his or her lifetime even after making the transfer on death designation. The sale of real estate cancels a transfer on death designation, but the grantor can certainly make the designation on any new real estate purchased.
3. The transfer on death designation can be changed or removed from the grantor's real estate at any time.
4. Real estate that transfers on death is transferred outside of the probate process upon the death of the grantor, which can save time and money.
If you are looking for ways to avoid the probate process, a Transfer on Death Deed may be an option to consider.