| What is a TODD?
READER QUESTION:
What is this “transfer on death” for a house deed to avoid probate? They said no revocable trust is needed. Is this correct?
MY RESPONSE:
What lawyer gave you that advice? This is a misleading question, and I understand why you may be confused. New York recently passed a new law that allows a TRANSFER OF DEATH DEED, known as a TODD. It allows you to file a new deed, name beneficiaries, and then, upon your death, it will go to them without probate. All that is true!
But is it good advice? The answer is usually no.
Let’s assume you have 3 kids and you sign a new TODD naming them as beneficiaries upon your death. If all three are alive, this will work fine. But what if one of them predeceases you, or you died together? Who then would inherit the house? The TODD system would say that the other two kids would inherit the house, unless you filed a new TODD to fix it before your death.
But what result did you really want? Most clients would say that if one of their three kids predeceased them, they would want their kids (the grandchildren, who they probably like more than their own kids anyway) to inherit. Moreover, you may want to place the grandchild’s share in a trust for their benefit until they reach a more responsible age, like 25 or 30, or 50! 😊
A revocable trust addresses real-life family situations far more effectively than a simple TODD. A TODD may avoid probate…but a trust plans for your family. |
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