Below are some answers to common questions related to transfer on death designations for real property interests:
What happens if a person owns real property with another person, with each having rights of survivorship, and then records a transfer on death designation affidavit (a “TOD Affidavit”)?
ORC 5302.22(C)(2) provides that if an individual owns real property (or an interests in real property) as a survivorship tenant and recorded a TOD Affidavit, then subsequently dies, the surviving survivorship tenant or tenants takes title to the real property. Upon the death of the last surviving survivorship tenant, title to the real property (or interest in real property) vests in the transfer on death beneficiary designated in the TOD Affidavit only if the last surviving survivorship tenant joined in the designation. In other words, if sisters Ann and Betty owned a house jointly with rights of survivorship and Ann (without joinder by Betty) recorded a TOD Affidavit to her niece Cathy, then title to the house does not vest in Cathy if Ann predeceases Betty. Ann’s death would result in the automatic termination and nullification of transfer on death designation made solely by Ann. Title would vest solely with Betty, and if Betty did not record any TOD Affidavit, then upon Betty’s death, the house would become part of her probate estate.
What happens if the TOD Affidavit designates an individual in his or her capacity as trustee of a trustee as a beneficiary (or contingent beneficiary) and that individual has died, has resigned or has been replaced by a successor trustee of the trust on the date of death of the owner?
The successor trustee of the trust will be considered the beneficiary (or contingent beneficiary) in existence on the owner’s death, regardless of the fact that the affidavit named the prior trustee. (See ORC 5302.22(G))
How does the beneficiary effect the transfer of the real property (or interest in real property) after the owner’s death?
The beneficiary completes and notarizes an Affidavit of Confirmation containing the information required by ORC 5302.222(A) and accompanied by a certified copy of the death certificate for the deceased owner (and for each designated beneficiary, if any, that did not survive the deceased owner). The Affidavit of Confirmation is then presented to the county auditor in which the real property is located and recorded with the county recorder of that county. (Note: if the land is located in a county where title to real property is registered, then the procedure for transferring the land from the deceased owner to the designated beneficiary will be pursuant to ORC 5309.081)
What if more than one beneficiary is designated in the TOD Affidavit?
Unless the TOD Affidavit specifies otherwise, the beneficiaries take title to the interest in equal shares as tenants in common.
Can the TOD Affidavit provide that the beneficiaries take title with rights of survivorship?
Yes, so long as the beneficiaries are natural persons. However, if a natural person is identified as a beneficiary solely in his or her capacity as a trustee of a trust, then that person isn’t considered a natural person for purposes of taking title as survivorship tenants.
Can I name a back up beneficiary in case the individual I name as a transfer on death beneficiary doesn’t survive me?
Yes, a TOD Affidavit may contain a designation or one or more persons as contingent transfer on death beneficiaries, who shall take the interest of the deceased owner in the event that the designated beneficiary does not survive the deceased owner or, in the case of a beneficiary that is not a natural person, does not exist on the date of death of the deceased owner. Note, if the TOD Affidavit names two or more beneficiaries and designated that title be taken by those beneficiaries as survivorship tenants, then no designated contingent transfer on death beneficiaries shall take title unless none of the original beneficiaries survives the deceased owner on the date of death of the deceased owner.
What effect does the existence of a recorded TOD Affidavit have on the real property while I own it?
It has no effect on the present ownership of the real property and the person or persons you designated as a transfer on death beneficiary have no interest in the real property until after your death.
Can I change my mind later after I record the TOD Affidavit?
Yes. You can revoke or change the transfer on death designation at any time without the beneficiary’s consent by executing and recording, prior to your death, a new TOD Affidavit that states the intent to revoke or changes the designation. The new TOD Affidavit automatically supersedes and revokes all prior recorded TOD Affidavits with respect to that real property, so long as the prior recorded TOD Affidavit was also executed prior to the later recorded TOD Affidavit.
What effect does the TOD Affidavit have on my home mortgage?
None. The rights of a mortgagee, or any judgment creditor or other lienholder are not affected by the designation of a transfer on death beneficiary. If a mortgagee takes action to enforce its mortgage on a home, it does not have to join any beneficiary as a defendant in the legal action unless that beneficiary has another interests in the real property separate from the transfer on death designation.
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