Today we have a casual chat with Indiana estate planning attorney Andy Stautz on the subject of Transfer on Death deeds.
Transcript:
Hey everyone, we’re back. Here in my office on a fine sunny Friday. Today I’m talking briefly about transfer on death deeds. These are a type of property deed, just like the ownership deed to your house. Except they work to pass your property along automatically as it were.
So it’s a deed where you get to specify a beneficiary, you specify who gets the property after you die. Just like a will. Except it’s not part of your will. These are pretty convenient because they let you avoid probate on your house. And for people whose house is their largest, most substantial asset passing the house with a transfer on death deed outside of probate means the remainder of their estate, whatever is left, could be suited for an informal probate, unsupervised, or the small estate administration – right now that limit’s $100,000. So, for clients who have a house and not a lot else, sometimes we can get the job done with just a simple will providing for an unsupervised or small estate probate and then pass the house with the transfer on death deed. And that’s all I need. Um, so that’s a really efficient plan.
Now the worry is, what about your beneficiaries predeceasing you. Let’s say you’re trying to give your house . . . to your two children. Um and both your children have children, so they’ve got . . . you’ve got grandkids. Well, if you leave it to both of them in the deed and then, you know, one of your children gets in a car crash or something terrible. What happens to the deed? Does it break? And the answer, fortunately, is no. There is a nice kind of statutory default. A backup plan. For transfer on death deeds, just like there’s a backup plan if you don’t have a will. So the the rules are . . . Well, it’s technical and you can look at them in the statute. I’m going to post a text version of this with more statutory references. Not to bore you with them here, but basically. If you’re trying to give it to your kids and one or more child predeceases you the grandkids, step up to get the parents share. So you don’t accidentally disinherit someone.
And if you try to pass it outside your family, though, if your beneficiary isn’t one of your kids, it’s some random person, that doesn’t happen. It doesn’t automatically go to that person’s kids. But those are both [defaults]. So in the in the deed itself you can specify how exactly you want it to go, if for some reason you don’t want that default. But the nice thing is it’s there.
So, umm, you know, one worry is “how flexible is the transfer on death deed for, you know, for other tragedies that could happen between when you make the deed and and when the deed takes effect?” The answer is more flexible than you might think.
So you know, if you’re interested in it as a planning tool, we’ll talk about it at your initial meeting and I’ll listen to your specific circumstances and we can decide whether we think it’s the right play for you or not. But that specifically legal advice that depends on your situation. So I hope you’ve enjoyed this brief overview. Set up your planning meeting if you want to talk about your specific situation and get actual legal advice. This has been for background. And your your general information. So. See you next time. Again, this is Andy Stautz for Stautz Law and I hope to talk to you soon.