Sunday, April 5, 2015

Death Deeds

What is a "Transfer on Death Deed?"

On June 12, 2014, the Washington Uniform Real Property Transfer On Death Act (HB 1117, 2nd Engrossed Substitute) was enacted making it possible for a person to transfer real property through the use of a deed taking effect at the transferor’s death (a “TOD deed”). This TOD deed allows the transfer of real property to the chosen beneficiaries at his or her death without a probate.

The Act provides that for an otherwise legally effective deed to transfer property on a transferor’s death the deed simply needs to state that “the transfer to the designated beneficiary is to occur at the transferor’s death.” It does not require notification nor acknowledgement to or from the beneficiary.

If an LPO - Limited Practice Officer, such as an escrow agent - receives written instructions from a party or parties to a transaction indicating that they wish the LPO to prepare a TOD deed, there is nothing in APR 12 that would prevent the LPO from inserting the above-quoted language, verbatim, into an LPB approved deed form.

23 other states have TODs including Oregon, Montana and Alaska. This deed must be recorded in the county where the property is located prior to the tranferor's death.

Only individuals may be transferors on a TOD deed, not LLC's, corporations, trusts, partnerships or joint ventures. At the time of the transferor’s death, title to the property is transferred automatically to the beneficiary.

An excise affidavit is required at the death of the Grantor, but no excise tax is due. The transfer legally occurs automatically – but a certified copy of the death certificate is recorded to perfect title.

If the transferor sells the real property to someone, the sale is equivalent to automatically revoking the TOD deed.

So maybe you can't take it with you after you die, but you can make sure that it goes to the persons you want without a lot of hassle or expense.

Happy investing!

No comments: