A transfer on death deed, or a TOD Deed, allows for individuals to pass real property to a beneficiary upon their death. Because the transfer occurs through the deed itself and is made effective upon death, the transfer is not part of the probate process.
In other words, a TOD Deed would essentially allow someone to transfer real property in the same way that they designate a beneficiary to a retirement account or have a payable-on-death designation with an account at a bank or other financial institution.
Using a TOD Deed can be a cost-effective tool in an estate plan. One of the big advantages to this kind of deed is that the owner retains full control and ownership of the property. Sometimes, people want to gift their child or other family member a joint tenancy with right of survivorship in a piece of property – but doing so gives that new owner a degree of control over the property and also makes the equity in the property susceptible to the reach of that new owner’s creditors. With a TOD Deed, however, the beneficiary has no ownership interest until the original owner dies. If the original owner later wants to change the TOD Deed, they would still have the ability to do so.
Unfortunately, Transfer on Death Deeds are not yet available in Kentucky. Rep. Dennis Keene of Campbell County has introduced HB 94 in the current session of the Kentucky General Assembly. If made law, Kentucky would become the fifteenth state to adopt the Uniform Real Property Transfer on Death Act. Kentucky was also the 15th state to join the USA - perhaps it is our lucky number?
Brackney Law Office, PLLC supports the adoption of the HB 94 (the Kentucky Uniform Real Property Transfer on Death Act) because it would provide Kentuckians with a new, cost-effective method of carrying out their estate planning wishes.
A full copy of HB 94 can be downloaded from the Legislative Research Commission by clicking here.