Those who own real estate and hope to pass it on to a beneficiary upon their death, but do not want to go to the trouble and expense of setting up a living trust may find that a transfer-on-death deed serves their needs effectively and efficiently. Not all states allow these deeds, which grant their users a simple, clean way to transfer real estate without passing through costly and time-consuming probate. Illinois, however, does recognize them.
Transfer-on-death deeds are allow you to create a deed that transfers real estate out of your name into the name of beneficiary, but the transfer itself does not occur until you pass away. Once you do pass away, the property transfers to the named beneficiary without passing through probate, saving time and expense.
Although you may create such a deed at any time, you still retain all of your rights to the property as its owner, including the right to sell the property or take out a mortgage against it. Your beneficiary does not gain any rights over the property until your death.
While you are required to record the deed with your county’s land records office, you may easily revoke the deed or create a subsequent deed and record it, essentially overwriting the previous deed. It is also worth noting that these deeds do not create a gift tax burden, because you do not give the property as gift during your own lifetime.
If you believe that a transfer on death deed may fit your needs, be sure to carefully consider all your legal options to keep your rights and privileges protected as you create an estate plan that truly represents your priorities and wishes.
Source: The Balance, “Avoid Probate With a Transfer-on-death Deed,” Julie Garber, accessed April 06, 2018