Many families are eager to obtain any tool that helps them avoid the probate process. Washington’s Uniform Real Property Transfer on Death Act can help them do just that, at least in regard to real property. This Act, codified in Chapter 64.80 of the Revised Code of Washington, and effective as of June 12, 2014, provides individuals the ability to transfer real property to one or more beneficiaries effective at the transferor’s death. This process may be accomplished by executing and recording a Transfer on Death (TOD) deed.
Requirements for a TOD deed:
- The transferor must have the requisite mental capacity (the same as the capacity required to make a will in Washington);
- Must contain the requisite elements and formalities of a properly recordable deed;
- Must state that the transfer to the designated beneficiary is to occur at the transferor’s death; and
- Must be recorded prior to the transferor’s death at the public records office of the county auditor in the county in which the property is located.
After a TOD deed is recorded, it is effective without notice, delivery to, or acceptance by the designated beneficiary during the transferor’s life. Consideration is not required. The TOD deed remains fully revocable during the transferor’s lifetime. A TOD deed may be revoked in the following ways: (1) it may be revoked by the transferor drafting a new TOD deed for the same property that expressly revokes, or is inconsistent with, the first TOD deed; or (2) it may be revoked by an intervivos deed that expressly revokes the TOD deed.
Beneficiaries of TOD deeds do not have an interest in the subject property until the death of the transferor. As such, prior to his or her death, the transferor may revoke the TOD deed, or change the beneficiary to the TOD deed without notice to the prior beneficiary. In fact, the transferor is free to transfer or otherwise encumber the property. Furthermore, creditors of the intended beneficiary may not seek to regain debts of the intended beneficiary from the equity of the subject property.
Upon the death of the transferor, the transferor’s interest in the property transfers to the beneficiary, along with the associated mortgage, taxes, liens and other encumbrances. Beneficiaries are not required to accept ownership of the real property upon the transferor’s death. They may disclaim their interest in the property. To do so, they must disclaim their interest, in writing, within nine months of the transferor’s death. If the beneficiary does disclaim (or does not outlive the transferor), the interest in the property lapses and goes to the next beneficiary in line, or back into the decedent’s estate.
The TOD deed is a helpful new tool for people planning their estates. Our firm can advise you as to how this new tool may fit into your estate plan.