Transfer-on-Death Deeds
Georgia real estate laws now allow for the creation of transfer-on-death deeds which have the potential to enable real property to pass to beneficiaries without the need to go through the probate process. It is important to ensure that all proper procedures are followed to enable this type of deed to work as intended.
At Peach State Wills & Trusts, in connection with your overall estate plan, we can review your situation to determine whether a transfer-on-death deed is the most efficient tool to transfer property or whether other options can accomplish your goals more effectively. We can prepare a transfer on death deed and take the time to ensure you understand how it operates and the steps required to avoid probate. Knowledge is the key to taking full advantage of Georgia's transfer-on-death-deed laws, and we work to provide you with the information you need for a successful outcome.
How a Georgia Transfer-on-Death Deed Operates
A transfer-on-death deed for real estate operates in a way that is similar to a beneficiary clause on a retirement account or a payable-on-death provision for a bank account—but with a significant difference. The deed names one or more beneficiaries to receive the property when the current owner or owners pass away. The current owner retains full use and control of the property during their lifetime. Unlike the situation created with certain life estate deeds, the beneficiary of a transfer-on-death deed does not acquire any type of active interest in the property—they just have the promise of a future interest, as they would if they were named the beneficiary of a will, unless the transfer-on-death deed is revoked or the owner sells the property.
The owner does not need permission from the beneficiary to take out a mortgage, make changes, or even sell the property. If you create a transfer-on-death deed, it does not diminish your ownership in any way or provide any current benefit to the beneficiary. It just creates an expectation that may or may not be fulfilled. If the deed is executed and recorded properly and if it is still in force at the time of your death, the named beneficiary or beneficiaries can acquire ownership of the property outside of the probate process so long as they file the appropriate affidavit in Superior Court within nine months of the time of death. If any one of these key steps is missing or the deed has been revoked or superseded, then the property does not transfer to the beneficiary but instead becomes part of your estate, requiring probate.
A Transfer on Death Deed Can Be Revoked
Creating a transfer-on-death deed is not the same as adding another person's name to a traditional deed. You aren't creating a co-ownership, so you can revoke the beneficiary designation at any time as long as you remain legally competent. If you want to make changes after creating a transfer-on-death deed you can do that. For example, you create a new transfer-on-death deed with a different beneficiary or simply revoke the initial beneficiary and choose to no longer have a deed that contains a transfer-on-death provision. The decision remains under your control.
Beneficiaries Need to Understand Their Obligations
A transfer-on-death deed can be a very helpful tool for avoiding the probate process if all the requirements are fulfilled. Our team can work to ensure that the deed is properly signed and recorded, but it will be important for beneficiaries to take the right steps to prepare and file the necessary affidavit in a timely fashion for the deed to transfer the property directly to the beneficiaries. If they fail to file the affidavit in time, then it is as if the transfer-on-death provision did not exist and the real estate will become part of your estate and distributed according to your will or the laws of intestate succession if you don't have a will.
Beneficiaries of your will need to be aware that when the requirements of the transfer-on-death deed are followed, the deed overrides provisions in your will. So if, for instance, your will leaves your house to all your children but you execute a transfer-on-death deed leaving your house to one child, then that one child can claim full ownership of the house by filing the appropriate affidavit. Provisions in your will regarding the house would have no effect if the house never becomes part of your estate due to the transfer-on-death deed provisions.
Find Out More About Whether a Transfer on Death Deed is Right for Your Situation
At Peach State Wills & Trusts, we know that the new transfer on death deed will be a very helpful tool for some individuals and families, and we are fully prepared to help you make the most efficient use of that tool when appropriate, consistent with your overall estate plan. For others, however, there may be more effective ways to transfer ownership of real estate outside the probate process. We can review your options, help you weigh the pros and cons, and put the plans into place you choose. We can also ensure that you understand how your plan will work and help you educate your beneficiaries, personal representative, trustee, and others who will be involved in carrying out your plans so that everyone understands their duties and responsibilities.
If you'd like to learn more about the new transfer-on-death deed and how it would fit with your estate planning goals, please contact us.
