Whether it’s the cautionary tale of Bleak House, or other tales of probate woe, many seek to avoid probate at all costs. The typical vehicle for avoiding probate with real estate was to move the property into a trust, usually a revocable living trust.
While relatively simple devices, trusts usually required seeking the services of an attorney and required vigilance – remembering to properly title assets in the name of the trust, updating the trust as tax laws change, moving property out of trust to refi and then moving it back, and so on.
Washington has recently enacted legislation adopting a new form of deed – a Transfer of Death Deed. A TOD Deed is made during the property owner’s life, but does not transfer title until the owner’s death. It is fully revocable – the owner may record a new TOD Deed or a Revocation, and the grantee has no interest in the property until the owner’s death.
Further, as transfer does not occur until death, it is treated for income tax purposes the same as any other transfer at death – the adjusted basis is stepped up to its fair market value.
Due to the flexibility and ease of use, TOD Deeds will become common place and will be a valuable tool in estate planning.
This blog post is offered for general information and educational purposes only. It is not offered as legal advice and does not constitute legal advice or opinion. Although I intend to keep this information current, I do not promise or guarantee that the information is correct, complete, or up-to date. You should not act or reply upon the information in this post without seeking the advice of an attorney.