Since 2014, Washington has been among those states that have enacted special laws that allow real estate ownership to be transferred to one or more beneficiaries upon the death of the owner, without probate, much in the way that some bank accounts pass to survivors. Chapter 64.80 RCW, entitled the Uniform Real Property Transfer on Death Act, provides for the execution and registration of a special document – a “Transfer on Death Deed” (“TOD deed”) – that can simplify matters considerably. While the TOD deed isn’t for everyone, it may be an important part of some Washingtonians’ estate planning.
Transfer on Death Deeds Have Certain Important Requirements
In order for the TOD deed to be valid, it must meet certain formal requirements. For example:
- The language in the TOD deed must specifically indicate that the transfer of ownership to the designated beneficiary is to occur at the owner’s death (otherwise it would be immediate)
- The TOD deed must be recorded in the county registry where the property is located, before the owner’s death
- The beneficiary is not required to sign or acknowledge the TOD deed; indeed he, she, or they may be totally unaware of its existence
Other Important Considerations
A number of other considerations should be kept in mind. Note, for example:
- That notwithstanding the fact that the TOD deed is recorded, it does not take effect until the owner’s death
- Ordinarily, the TOD deed may be revoked by the owner at any time prior to his or her death
- If, however, the TOD deed has been executed by joint owners with rights of survivorship or by spouses as community property, all owners must revoke the deed together for the revocation to be effective
- The owner retains the right to sell, mortgage, or make a gift of the property during his or her lifetime
- The owner must continue to pay taxes on the property during his or her lifetime
- From the beneficiary’s viewpoint, the interest is only an “expectancy” (i.e., creditors of the beneficiary may not assert a claim against the property during the life of the owner)
- At the owner’s death and upon the registration of a copy of the death certificate, the beneficiary takes title to the real property subject to any encumbrances, mortgages, liens, or other liabilities of the owner.
TOD Deeds May Be Useful in Planning Your Estate
While a TOD deed should never be considered in isolation, for some it can be part of an effective estate plan. Real estate owners should recognize that if an elderly owner presents himself or herself at an attorney’s office, particularly if accompanied by the beneficiary, and indicates he or she wants a TOD deed, the attorney might have questions as to the appropriateness of the motivation. Careful discussion about the motives is likely in order. Moreover, it is not at all uncommon for some clients to fix on an issue, such as the “horrors of probate,” all the while failing to realize that other issues are important as well in estate planning. The TOD deed can, however, be effective, where simplicity is the goal.
Skilled, Experienced Legal Counsel is a Key to Effective Estate Planning
Do you have a will? Have you contemplated what should happen to your property upon your death? Blado Kiger Bolan, P.S. has more than 30 years of combined experience providing both individuals and businesses with quality legal services throughout the Pacific Northwest. We have helped clients with both simple and complex issues related to estate planning, and would be pleased to share our experience with you. We pride ourselves on designing the simplest, most effective solution for your legal issue. For assistance with a will, a trust, or any sort of estate planning issue, contact us on the web, or call our office at 253-272-2997.