Steps to Take When Inheriting via a Transfer on Death Deed (TODD)

It is common to inherit real property through a TODD (transfer on death deed). The inheritance happens automatically by operation of law upon the owner’s death to the beneficiary named in the TODD. Even so, there are several steps you will need to take if you are the beneficiary who inherited real property via a TODD.

First, you will need to contact the insurance company and change the owner of the policy from the decedent to you. If the policy is not changed and disaster strikes (e.g., a fire that destroys the home), homeowner’s insurance will not provide coverage. Second, you will need to reapply for the homestead exemption if you are going to claim the real property as your homestead (which includes a qualified relative residing in the home). Third, you need to make an application to the Department of Human Services to obtain a Medical Assistance Clearance Certificate to clear title to the home. Lastly, you will need to record, with property records, an Affidavit of Survivorship and Medical Assistance Clearance Certificate. This step is required so that you have clear title to the property in the event that you wish to sell it in the future.

TODDs are often an effective way to transfer real property. Even so, as with any type of estate plan, there are downsides. But, if you take the steps listed above, you should avoid common issues regarding inheriting real property via a TODD.

Spangler and de Stefano, PLLP advises business owners and individuals on estate planning, including the use of TODDs.

The material contained herein is for informational purposes only, and is not intended to create or constitute an attorney-client relationship between Spangler and de Stefano, PLLP and the reader. The information contained herein is not offered as legal advice and should not be construed as legal advice.