If you are making a will or creating a trust you may want to consider including a transfer on death deed or TOD.
A transfer on death deed makes it possible for you to transfer real property, most often a house or cabin, to a named beneficiary when you die.
The benefits of a TOD
Because the actual moving (or “transfer”) of your property is done through the deed and only happens in the event of your death, this can help your estate avoid the probate process. You retain full ownership and control of the home (or cabin or other property) until it is transferred, that is until you die. If you own your home or other property jointly with your spouse then the TOD does not become active until both of you die. Kentucky does not impose an estate tax. The IRS considers only inherited property that is valued at over 11.40 million as taxable in 2019.
What a TOD includes in Kentucky
An estate planing attorney can guide you through the TOD process which includes:
- Naming a beneficiary
- A legal description of the property
A TOD is a legal document which requires specific language, format and details. If it is not done properly it will not be valid. There are other ways to avoid the probate process such as a living trust.