As an Ohio estate planning lawyer, I frequently meet with clients seeking ways to pass property to loved ones while minimizing the costs and delays associated with probate. One option that can work well in certain circumstances is the “Transfer on Death (TOD) designation affidavit”. A TOD affidavit allows real estate to be transferred directly to a named beneficiary upon death, bypassing the probate court. Many families appreciate this tool because it is relatively simple to set up, flexible during life, and effective in transferring property. However, like any estate planning strategy, it must be used carefully to avoid unintended consequences.
Ohio law specifically authorizes TOD designation affidavits under Ohio Revised Code § 5302.22 and § 5302.23. These statutes establish the framework for creating and recording a TOD designation affidavit, which serves as the legal instrument transferring the property. While this option can be valuable, it is not always appropriate for every estate plan, and understanding the legal requirements is essential.
How Transfer On Death Affidavits Work
A TOD affidavit does not transfer ownership during the property owner’s lifetime. Instead, the owner records a TOD designation affidavit with the county recorder’s office while retaining full rights to the property. This means the owner can sell, mortgage, or otherwise change the property without the beneficiary’s consent. The transfer only takes effect when the owner passes away.
Under R.C. § 5302.23, the document must be signed, notarized, and recorded properly to be valid. If it is not recorded before the owner’s death, the transfer is ineffective. Once effective, the beneficiary gains ownership without the need for probate, which can save time and money.
Benefits Of Using TOD Affidavits
The most significant benefit of TOD affidavits is probate avoidance. Probate in Ohio can be a lengthy and costly process, particularly for families who want to settle affairs quickly. By using a TOD deed, the property transfers automatically upon death, simplifying administration.
Another advantage is flexibility. Because the owner retains full control during life, they can revoke or change the TOD designation at any time. This allows for adjustments if circumstances change, such as new family relationships or changes in financial needs.
Potential Drawbacks And Legal Considerations
While TOD affidavits offer benefits, there are limitations. One potential drawback involves multiple beneficiaries. If more than one person inherits under a TOD deed, disputes can arise over the management or sale of the property. Additionally, creditors may still make claims against the property if debts remain unpaid, as provided under R.C. § 2117.25.
TOD deeds may also complicate Medicaid planning. Because the property remains in the owner’s name until death, it is still counted as an asset for Medicaid eligibility purposes. In some cases, other estate planning tools may be more effective.
When To Use TOD Affidavits
TOD affidavits are particularly useful when the goal is to transfer real estate quickly and easily to one or more trusted beneficiaries. They work well for individuals who want to ensure a home passes to children or close relatives without probate. However, when estates involve multiple properties, blended families, or significant debt, a trust or more comprehensive estate plan may be necessary.
Before recording a TOD designation affidavit, it is important to review how the transfer fits with the overall estate plan. What works for one family may not be the right choice for another.
Frequently Asked Questions About Ohio Transfer On Death Deeds
What is a transfer on death affidavit in Ohio?
A transfer on death affidavit, authorized under Ohio Revised Code § 5302.22 and § 5302.23, allows property owners to record a legal document naming a beneficiary who will inherit real estate upon the owner’s death without going through probate.
Can a transfer on death deed be changed or revoked?
Yes. A TOD affidavit can be revoked or modified at any time during the owner’s lifetime, as long as the new designation is properly recorded with the county recorder’s office before the owner’s death.
Does a transfer on death affidavit protect property from creditors?
No. Under R.C. § 2117.25, the beneficiary may still be subject to creditor claims against the estate. If debts remain unpaid, creditors may seek repayment from the property even after it has transferred.
Can multiple beneficiaries be named on a TOD affidavit?
Yes, multiple beneficiaries can be named. However, this may lead to complications if beneficiaries disagree on whether to sell or maintain the property. Clear communication and careful drafting can help reduce conflicts.
Does a TOD affidavit affect Medicaid eligibility in Ohio?
Yes. Because the property remains in the owner’s name until death, it is considered a countable asset for Medicaid eligibility purposes. For individuals planning for long-term care, other strategies may be more appropriate.
Is a transfer on death affidavit the same as a will or trust?
No. A TOD deed is limited to real estate and only controls the property specified in the affidavit. A will or trust can address broader estate planning needs, such as distributing personal property, financial accounts, or managing complex family arrangements.
Call The Law Office Of John C. Grundy Today
At The Law Office of John C. Grundy, I help clients determine whether a Transfer on Death affidavit is the right solution for their estate planning needs. I ensure compliance with Ohio law and explain how this tool fits within a comprehensive plan for protecting assets and family members.
We invite you to schedule your consultation with our Ohio estate planning attorney at The Law Office of John C. Grundy when you call us at 330-637-9030. From my office in Cortland, I serve clients throughout the entire state of Ohio with dedicated estate planning services.