A transfer on death (TOD) deed is like a regular deed you might use to transfer your Indiana real estate, but with a crucial difference: It doesn't take effect until your death. At your death, the real estate goes automatically to the person you named to inherit it (your "beneficiary"), without the need for probate court proceedings. (Ind. Code §§ 32-17-14-1 and following.)
You must sign the deed and get your signature notarized, and then record (file) the deed with the county recorder's office before your death. Otherwise, it won't be valid.
You can make an Indiana transfer on death deed with WillMaker.
The beneficiary's rights. The person you name in the deed to inherit the property doesn't have any legal right to it until your death—or, if you own the property as a "joint tenant" with someone else, until the last surviving owner dies. (More on this below.) The beneficiary doesn't sign the deed, but it's a good idea to let the beneficiary know you've recorded it. Otherwise, he or she might not know about it, even after your death.
Earlier wills or TOD deeds. If you have made a will or previous TOD deed that leaves the property to someone, your new TOD deed will override it.
Your rights. You keep complete ownership of, and control over, the real estate while you're alive. You pay the taxes on it, and it's not protected from your creditors. You can sell it, give it away, or mortgage it. Because you're not making a gift of the property, there's no federal gift tax.
Medicaid. Creating a TOD deed shouldn't affect whether or not you are eligible for Medicaid. Because you own the property and are not actually giving it away during your lifetime, a TOD deed won't help you "spend down" your assets to help you qualify for Medicaid. Beware, though, that if you do end up receiving Medicaid benefits—for example, to pay for nursing home care—your home might be liable for reimbursement of Medicaid expenditures. If you have questions, consult a local attorney.
Other creditors. Even though your TOD deed transfers your property outside of probate, if your probate property isn't enough to satisfy certain creditor claims and statutory allowances (certain amounts your spouse and children are entitled to at your death, set out by law), your beneficiary might be liable for these claims, up to the value of the property.
Revoking the deed. If you later change your mind about who you want to inherit the property, you are not locked in. You have two options: (1) sign and record a notarized affidavit that either revokes or changes the beneficiary designation, or (2) record another deed that revokes, omits, or changes the beneficiary designation. (Ind. Code § 32-17-14-16(j).) You cannot use your will to revoke or override a TOD deed.
How ownership is transferred. To get title to the property after your death, the beneficiary must take a few administrative steps (such as recording a certified copy of the death certificate in the recorder's office). Your beneficiary can check with the county recorder's office for details. Note that in Indiana, the recorder's office might direct your beneficiary to seek a lawyer's help, but if your beneficiary does need a lawyer to continue, this assistance should be simple and limited in scope. No probate is necessary.
If you own the property with someone else, how to proceed depends on how you and the other co-owner(s) hold title to the property. For guidance, read Making an Indiana TOD Deed When You Co-Own Property, which will walk you through the process of determining (1) how you co-own the property, and (2) whether you should make a TOD deed with your co-owner or alone.
You can name anyone you please to inherit your real estate—a person, more than one person, or an organization such as a favorite charity. But if you want to name more than one person, or a minor, there are some issues you should consider.
More than one beneficiary. Before you name multiple beneficiaries on your transfer on death deed, make sure you consider 1) how the co-beneficiaries will hold title to the property after you die, 2) what will happen if one of the co-beneficiaries dies before you do, and 3) how the beneficiaries will feel about co-owning the property.
As to the first issue, when you make WillMaker's transfer on death deed for Indiana, your property will transfer to your beneficiaries in equal shares with no right of survivorship. This is the default under Indiana law. In other words, your beneficiaries will own your property as tenants in common and each beneficiary will be free to leave his or her share to someone else or to sell that share of the property.
Example: You name Tim, Stephanie, and Rebekah as your TOD beneficiaries. After you die, they will own the property as tenants in common. Tim leaves his one-third share of the property to his son Cameron in his will. Stephanie sells her one-third share of the property to Anya. After Tim dies, Cameron, Anya, and Rebekah own the property.
As to the second issue, if one or more of the beneficiaries dies before you do, their share or shares of the property will be transferred to the surviving beneficiaries.
Example: You name Tim, Stephanie, and Rebekah as your TOD beneficiaries. Tim dies before you do. Stephanie and Rebekah would each inherit half the property. They would own it as tenants in common, and are each free to sell or leave their half of the property to someone else.
Finally, think carefully about how your beneficiaries will feel about owning the property together. Co-ownership is cumbersome and often causes tension. For example, one co-owner could force a sale of the property even if the other co-owners didn't want to sell.
Children under 18. Think twice about naming a child under age 18 as a beneficiary. A child can take title to the property, but an adult will need to manage it.
When making a TOD deed with WillMaker, you can name an adult "custodian" under the Indiana Uniform Transfers to Minors Act (UTMA) to manage the property. Under Indiana's UTMA, the beneficiary becomes the outright owner of the property at age 21.
You may have other options for naming an adult property manager, including:
For more information, see Naming a Minor Beneficiary for a Transfer on Death Deed. For help setting up a property management method, consult a qualified estate planning lawyer.
Alternate beneficiaries. If you wish, you can name an alternate (contingent) beneficiary. This beneficiary will inherit the property if your first-choice beneficiary (or all of them, if you named more than one) die before you do.
Several kinds of legal descriptions are used in Indiana. Just copy what's on the previous deed that transferred the property to you. Here are two examples:
If the legal description is too long to safely type out (they can even run several pages long), simply photocopy or scan and print it, and attach it to the transfer on death deed as "Exhibit A."
Accurate, plain-English legal information can help many people create useful legal documents. But general information is never a substitute for personalized advice from a knowledgeable lawyer. If you want professional advice about the best way to craft or use legal documents in your particular circumstances, consult an attorney licensed to practice in Indiana.