What is a TOD affidavit and how can it help you?
A transfer on death designation affidavit or a TOD affidavit is a special kind of affidavit that allows a real property owner to transfer the real property without having to go through probate. It is authorized under Ohio Revised Code Section 5302.22. Because it is not a deed, it only needs to be recorded and does not need to go through the tax maps or auditor which saves on conveyance and transfer fees.
One of the benefits of having a TOD affidavit is that it avoids probate. One just needs to file the affidavit with the recorder's office. Then when that person passes, the designee just has to record an affidavit of their own with an attached death certificate. The property will then transfer to the designee outside of probate. This is a convenient tool because it avoids probate without having to pay the expense for a trust. It is also advantageous because it is not considered a conveyance. Therefore, the designee's judgment creditors cannot reach the property while the original owner is still alive.
One of the disadvantages of a TOD affidavit is that there is no fiduciary control. For example, a mother can designate her three children in a TOD affidavit. After she passes, the property will transfer to the three children. If the three children do not get a long, then it will be difficult to manage the property. If one child wants to live there while two of them want to sell the property, they will not be able to sell the property without all three of the children's signatures. If they cannot decide what to do, one of them may have to file a partition action in court which could lead to attorney fees and court costs. If the mother would have just left the property to the children in a will, then the executor would have the authority to either sell or distribute the property to the children.
A TOD affidavit is a wonderful estate planning tool. However, make sure to speak with an attorney to see if a TOD affidavit is right for you. If you have questions about a TOD affidavit or any other estate planning tools, feel free to give me, attorney Mark Cicero, a call today at (440) 390-2337 for a free 30-minute consultation. I would be happy to meet with you and answer any questions that you may have.
