It has been a year since Illinois introduced the Illinois Residential Real Property Transfer on Death Instrument Act (755 ILCS 27/1 et seq). The Act authorizes certain owners to transfer their residential real estate located in Illinois outside of probate by using a pre-recorded document called a Transfer on Death Instrument (“TODI”).
What can a TODI be used for?
A TODI can be used to transfer real property with one to four residential dwelling units, or a single tract of agricultural land consisting of 40 acres or less with a single family residence. The purpose of a TODI is to transfer real property upon the death of the owner without the need to go through the probate process.
What are the requirements for a TODI?
There are three basic requirements for properly executing an TODI: 1) it must conform to the recording requirements of a typical deed, and be executed, witnessed and acknowledged as required under the Act; 2) it must state that the beneficiary is to receive the property at the owner’s death; and 3) it must be recorded in the county where the property is located prior to the owner’s death.
Can a TODI be made irrevocable?
No. Even if the document states that the instrument is irrevocable, the Act states that any TODI can be revoked at any time prior to the owner’s death.
Who can be the beneficiary of a TODI?
Any legal entity that is capable of owning residential real estate can be the beneficiary of a TODI. This includes individuals, joint owners, trusts, corporations, limited liability companies and other entities. In addition, successor beneficiaries can be named in a TODI in the event that the first named beneficiary predeceases the grantor.
How does the grantor revoke a TODI?
A grantor of a TODI must have the same capacity to revoke the TODI as would be required to revoke a will. An agent of the grantor can only revoke a TODI if the power to do so is expressly authorized by a durable power of attorney, or a similar document. To revoke the TODI, the grantor may do one of two things: 1) record a new TODI that expressly revokes the prior TODI or revokes it by inconsistency; or 2) recording an instrument of revocation expressly revokes the TODI, either in whole or in part.
If you have more questions regarding the use of TODI, or any other estate planning topics, please contact us.