Q: Can an individual transfer real estate, such as a house and property, and avoid probate administration upon death without creating a trust to do so?
A: Yes. Ohio law allows individuals who do not need the estate administration benefits of a trust agreement to avoid Probate on the transfer of real property by executing a legal document called a Transfer-On-Death (“TOD”) Designation Affidavit.
Q: What is a TOD Designation Affidavit?
A: A TOD Designation Affidavit is an “effective upon death deed” showing the clear intent of the owner of real property to directly transfer the ownership of the real property upon the owner’s death to whomever the owner designates by name.
Q: How does it work?
A: The TOD Designation Affidavit, when properly recorded, permits the direct transfer of the described real property to the designated beneficiary or beneficiaries upon the death of the owner, thus avoiding Probate administration. The recording of the transfer is accomplished by filing a death certificate and an affidavit signed by any person knowing the facts of the transfer, including possibly the designated beneficiary, in the Recorder’s office. The owner of the real property can change and/or revoke a TOD designation at any time by executing and properly recording a new TOD Designation Affidavit. However, a TOD Designation Affidavit does not eliminate any federal estate taxes that otherwise would have been payable.
Q: Can the person who is designated as the TOD beneficiary claim an interest in the real property before the owner dies?
A: No. A TOD Designation Affidavit has no effect on the present owner of the real property and the designated beneficiary has no rights or interest in the real property during the owner's lifetime.
Q: Does the law allow for more than one beneficiary?
A: Yes. Under Ohio law, the owner of real property may designate one or more other persons identified in the TOD Designation Affidavit by name and the owner may also designate contingent TOD beneficiaries by name. Due to the requirement that the beneficiaries be identified in the TOD Designation Affidavit by name, a designation of “my children” would not be valid.
Q: What if the TOD beneficiary dies before the owner?
A: The owner of the real property can designate contingent beneficiaries by name and those contingent beneficiaries would then receive the interest of the previously deceased TOD beneficiary. For example, the TOD beneficiary could be “Mary Smith, if living; otherwise John Smith.” If no named TOD beneficiary is living at the time of the owner’s death, the real property becomes part of the owner's Probate Estate.
Q: Can an individual who owns real property with a “joint and survivorship” title execute a TOD Designation Affidavit?
A: Yes. Individuals who own real property titled as “joint and survivorship” can execute a TOD Designation Affidavit. Upon the death of such an individual, the real property passes to the surviving owner and only upon the death of the last surviving joint and survivorship owner does the real property pass to the beneficiary or beneficiaries named in the TOD Designated Affidavit. The last joint and survivorship owner however must join in the TOD Designated Affidavit.
Q: How can a TOD Designation Affidavit be created?
A: Consult an attorney to prepare a TOD Designation Affidavit. Provide the attorney with a copy of the current deed and the name of the intended beneficiary and/or beneficiaries and any contingent beneficiaries.
This “Law You Can Use” consumer legal information column was provided by the Ohio State Bar Association (OSBA). It was prepared by John W. Eilers of Wood & Lamping LLP in Cincinnati and updated by Garrick O. White of Anspach Meeks Ellenberger LLP in Toledo.