As of January 1, 2012, Illinois property owners have a new way to transfer residential real estate. The Illinois Residential Real Property Transfer on Death Act authorizes owners of residential real property to transfer their property using a pre-recorded instrument called the Transfer on Death Instrument (“TODI”).
There are three requirements for creating a TODI. First, it must contain the same elements as a deed (e.g. legal description of the property, name and address of the owners, designated beneficiaries) and it must be executed, witnessed by two disinterested individuals, and acknowledged. Second, it must state that the transfer to the designated beneficiary will occur at the owner’s death. Third, while the owner is still alive, the TODI must be recorded with the country recorder’s office in the county where the property is located.
A TODI can be revoked by the owner at any time while he or she is still alive by recording an executed, witnessed and acknowledged revocation in the same way that the TODI was created.
If the beneficiary under a TODI cannot be found or does not survive the owner, the transfer lapses and the property passes to the owner’s estate unless the TODI has an anti-lapse provision, under which alternative beneficiaries can be designated.
The transfer is effective when a notice of the owner’s death and acceptance by the beneficiary is recorded with the county recorder’s office. However, a beneficiary can disclaim the transfer, in which case the property passes to the alternate beneficiary, if any, or merely passes to the owner’s estate. If the beneficiary fails to accept the transfer within two years of the owner’s death, the TODI is void. However, if the beneficiary has not accepted the transfer within 30 days, the representative of the owner’s estate must make a reasonable attempt to locate and notify the beneficiary. Meanwhile the representative may take possession of the property and maintain it.
Prior to the TODI act, residential real estate had to be transferred by a will or trust at death. The TODI allows for a simplified method of transferring property at death outside of probate. As with any estate planning tool, you should talk to an attorney about whether a TODI is right for you.
DeBlasio & Gower assists individuals, couples and families with estate planning issues. For more information, please visit our website at https://dgllc.net
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