June 19, 2015
Under Ohio law, individuals can avoid probate in connection with real estate by executing and recording a Transfer On Death (TOD) Designation Affidavit. A TOD Designation Affidavit is an “effective upon death deed” allowing the owner to transfer the ownership of real estate upon the owner’s death to whomever the owner designates by name. On the death of the owner, the transfer of the real estate to the transfer on death beneficiary is accomplished by filing a certified death certificate and an Affidavit in the applicable County Recorder’s Office.
During the life of the owner, the designated beneficiary has no rights to the real estate, and the recording of a TOD Designation Affidavit does not create a present entitlement to the real estate. The TOD Designation Affidavit can be revoked at any time without the consent of the TOD beneficiary. The TOD beneficiary only becomes entitled to the real estate if the TOD Designation Affidavit remains in effect on the death of the owner.
An individual can designate more than one party as a TOD beneficiary. If multiple TOD beneficiaries are designated, the division of the ownership can be varied among the beneficiaries (e.g. 10% to John Doe and 90% to Jane Roe).
The TOD beneficiary can be the trustee of the owner’s revocable trust. There are advantages and disadvantages to making a trustee a TOD beneficiary as opposed to directly transferring the real estate to the trustee to hold for the trust.
A TOD designation will lapse if the TOD beneficiary predeceases that owner; however, it is possible to designate a contingent TOD beneficiary as a means of addressing this possibility (e.g. to John Doe, if living; otherwise to Jane Roe).
Individuals who own property in “joint and survivorship” can designate a TOD beneficiary of their real estate. Only upon the death of the last surviving survivorship tenant will real estate pass to the TOD beneficiary or beneficiaries designated in the TOD Affidavit.
Please contact us if you would like to determine if a TOD Designation Affidavit is right for your estate plan.