If you own property that is only in your name—or if a family member is the sole title holder to property that you might want to inherit—listen up.
We’ve all seen the late-night cable movies in which someone uses his dying breath to declare: “And…make sure…my scheming nephew…doesn’t get my lake house!”
This last-breath wish makes for good (er, terrible) TV drama, but it won’t do a thing in court. If someone passes away as the sole title holder to any real estate, that property must go through probate. Probate is a court proceeding that can be both lengthy and very expensive. In some cases, we’re talking judges, hearings, piles of paperwork—the works. The court will appoint a Personal Representative to take charge of the estate, and that person has the power to hire a real estate agent to sell the property in question. Even an “informal” probate, which is what happens when you have a very straightforward, uncontested case, can be expensive.
So even if you thought Grandpa’s lake house was going to land in your lap thanks to all the delightful memories you made there, it’s not that simple.
The good news: You can avoid probate.
As the sole title holder of property, you can set up a Transfer on Death Deed (TODD). A TODD automatically transfers property from one party (the Grantor) to another (the Grantee(s)) upon the Grantor’s death. This simple document can keep real estate out of probate. A TODD trumps a will and is rock-solid in court.
Unlike other types of deeds, to be valid, a TODD must be formally recorded prior to a Grantor’s death. That means you can’t use a TODD to posthumously award yourself Grandpa’s lake house. But what if Grandpa used a TODD to choose his “scheming nephew” as the lake house Grantee when they were on better terms, but then the relationship soured? No problem. Grandpa can revoke the TODD during his lifetime.
Clearly, a TODD is a great option for most people who own property in only their name. If that’s you, we highly recommend setting up a TODD at your earliest convenience. The team at Johnson/Turner Legal can help.
Of course, you may have arrived at this article because it’s already too late for a TODD, and you’re facing probate. Don’t panic. That’s why we’re here. Johnson/Turner Legal can handle the probate on your behalf. It’s not a quick process, but we’ll help make the process less stressful. The initial probate process can take about six months. Appointing a Personal Representative typically takes 6-8 weeks. There is another 30-day waiting period once a Personal Representative is appointed before a property can be transferred. Many family members worry that they’ll lose out on interested buyers during that waiting period, but Johnson/Turner Legal can work with the title company to let the closing proceed even if the probate process hasn’t been finalized. Proceeds of the sale will be held in escrow until everything is buttoned up and final papers are filed.
