In Colorado, a Transfer-On-Death (TOD) deed is also known as a beneficiary deed. This written document is an estate planning tool that helps the “grantor” (you) transfer their real estate property’s title/s to their chosen beneficiaries once they pass away.
If you are wondering whether a TOD deed is right for your personal circumstances or not, here are three benefits that this legal document can offer:
Your property can bypass probate
If you own your house and you want to pass it down to one of your children after your death, a TOD deed can help you with this. Unlike a will, your TOD deed can offer direct transfer of ownership to its designated beneficiaries without the need of probate court.
Additionally, if you own multiple real estate property (e.g., retail space, restaurant, condominium, ranch) you can choose to pass them on to multiple beneficiaries as well.
Your TOD deed can be updated any time
A TOD deed can provide you with the flexibility you need to revoke it or make changes to its content at any given time, so long as you follow your state’s proper legal procedures.
For example, when you made your original document, you only had two real estate property listed on it. After a few years, you purchase new ones and you want to include them in your deed. Since your TOD deed is not irrevocable, you are free to do so.
Your property will remain yours until you pass away
A valid TOD deed only takes effect upon the owner’s death. This means that even if you name a beneficiary in your document, you will still retain full ownership of your listed property as long as you are alive.
Upon your death, your legal document will take effect, and your property (plus its interest) will be transferred to your beneficiary or beneficiaries.
By thinking ahead, you can secure your family’s future
Every person deserves to pass on with dignity and peace in their mind. By carefully drafting your TOD deed and following the legal process involved, you can be certain that your loved ones can receive the inheritance that you wish to give them after your passing.