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Transfer on Death Instruments: What Are They and Why you may or may not want one for your Estate

A Transfer on Death Instrument or “TODI” is a tool that people in the process of planning their estates can utilize to protect specific property from passing through probate. These instruments are legal tools that immediately transfer particular property to a beneficiary when the property owner passes away. For example, suppose a father wants to ensure a transfer of a family cabin to his daughter upon death. In that case, he can execute a TODI, and the cabin would automatically transfer to his daughter if and when the father dies.

That sounds simple, right? As nothing in the law is ever that simple, these transfer on death instruments have several benefits and drawbacks that individuals should be aware of when considering executing a TODI with a local attorney.


For some, a TODI can obviate the need for a trust, for others, a TODI can work in conjunction with a trust. One of the most significant benefits to TODIs come from the Jan 1, 2022 changes to Illinois law permitting individuals to create TODIs for any real property in Illinois. Previously this mechanism had only been available for certain residential real estate. In addition to the automatic transfer upon death without the need for probate, TODI’s benefit clients by preserving the client’s ability to act freely during their lifetime, and even change their mind about a beneficiary.  The act now clearly states that even after enacting a TODI, the owner of that property can still sell, transfer, or encumber their real property. Therefore, even if an owner executes a TODI, the owner does not need to worry about the potential beneficiaries when selling or mortgaging the property. If there is no owned property at death, the TODI will be rendered null.


Though the automatic nature of TODIs is a huge plus, there are many factors to consider before choosing whether the instrument is worth it for your needs. First, should you decide to execute a TODI, it is only effective if properly executed and recorded with the recorder of deeds during the property owner’s lifetime. This is a significant point of consideration for people debating executing a TODI in ill health.

TODIs may not be a good option where you wish to leave your property to several heirs because a TODI, unlike a trust, simply conveys the property. It does not have rules governing how the beneficiaries share of sell the property, pay taxes, afford repairs, or make decisions together.

TODIs also pose unique problems in contentious situations where one or more of your heirs is likely to contest the validity of your conveyance.

Transfer upon death instruments are not one-size-fits-all, but they can ensure that the real estate you want your beneficiaries to receive is automatically transferred upon your passing and for many can be a very simple and affordable tool for estate planning. To properly execute a TODI, please consult with your local Downers Grove Probate Attorneys at SBK Law Group. They can assist you with any testamentary or non-testamentary estate planning needs.

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