Using a transfer on death deed is one tool for distributing property.
Estate planning is multifaceted.
It involves considering taxes, health care, finances, property, and business interests.
The methods used in estate planning can either align with or interfere with your goals.
According to a recent The Williamson Daily News article titled “Estate planning ensures your wishes are carried out,” many people do not understand the options available to them when it comes to reaching their estate planning goals.
Most people simply believe a last will and testament is the only means for transferring assets.
Although a last will and testament provides a foundation for an estate plan and allows the testator to select heirs, using this tool alone is insufficient when it comes to comprehensive estate planning.
Additional tools include trusts, life insurance policies, retirement accounts, powers of attorney, advance health care directives, and transfer on death deeds.
How might a tool like an transfer on death deed benefit your estate plan?
In a situation where one child provided greater care and support to you as you aged, you may choose to leave a larger inheritance to this caregiver child.
While you could designate varying percentages of your estate to go to each child, this may require the selling of the family home to satisfy the terms.
If you want your caregiver to receive your home, you could utilize a transfer on death deed.
What does a transfer on death deed accomplish?
It allows you to name your caregiver as the direct recipient of specific real estate, like your home.
When you die, the ownership of your home (in this hypothetical) would be transferred from you to your caregiver as designated on the deed.
Does this impact your ownership and control of your home while you are alive?
While you are yet living, home would not be jointly owned between you and your caregiver.
It is your residence alone while you are alive.
In fact, you can even gift or sell your home despite the transfer on death deed.
When you die, the property simply bypasses probate so your caregiver child can take full possession of the home quickly.
Because you are still the owner of the home during your lifetime, you can revoke the transfer on death deed at any time.
Only 29 states and the District of Columbia recognize transfer on death deeds in estate planning.
Both Kansas and Missouri are included in this number.
Like all estate planning, preparing a transfer of death deed is not a wise DIY project.
An experienced estate planning attorney can help you determine if a transfer on death deed aligns with your comprehensive estate planning goals.
If is does align with you goals, then that attorney can help make sure it is properly prepared, legally executed, and duly recorded.
Reference: Williamson (WV) Daily News (April 21, 2021) “Estate planning ensures your wishes are carried out”