On July 19, 2024, NYS enacted a law allowing TOD Deeds, wherein you can transfer your house or other real property directly to named beneficiaries upon your death. The TOD Deed is a simple, cost-effective way to designate beneficiaries for your real property, while remaining in complete control of the property during your lifetime and avoiding the probate process in Surrogate’s Court upon your death.
Sound too good to be true? For many of our clients, it probably is. While the law just recently went into effect, it’s easy to spot the drawbacks of a TOD Deed when compared to the many benefits of a Trust. Problems can arise if you name multiple beneficiaries on the TOD Deed, who may fight over the ultimate sale of the property. In addition, unlike property owned by a Trust, the property subject to a TOD deed can be clawed back into an estate to satisfy creditor’s claims. Additional problems may arise if you need to qualify for Medicaid to pay for long-term care, because the property may make you over-resourced for Medicaid purposes, and will remain subject to Medicaid liens after your death. Trusts avoid these complications and maintain your privacy, unlike TOD deeds that become public records.
Please do not hesitate to contact us to learn more. We offer free consultations and we’re happy to determine the best estate plan to fit your needs.
