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Understanding Georgia’s Transfer-on-Death (TOD) Deed

On July 1, 2024, Georgia enacted laws permitting the use of a Transfer-on-Death Deed (TODD) for real estate transfers. This new legal mechanism allows property owners to designate beneficiaries who will inherit their real estate without the need for probate. Understanding the legal requirements and implications of a TODD is crucial for both property owners and beneficiaries.

What is a Transfer-on-Death Deed (TODD)?

A Transfer-on-Death Deed is a legal document that enables a property owner (Grantor) to designate a beneficiary (Grantee) who will inherit real estate upon the owner’s death. Unlike a traditional deed, the TODD does not transfer any ownership rights during the Grantor’s lifetime. Instead, the designated beneficiary receives the property only upon the Grantor’s passing.

How to Properly Execute a TODD

For a TODD to be legally valid in Georgia, it must:

  • Be properly drafted and recorded.
  • Be signed by the property owner (Grantor).
  • Designate one or more beneficiaries (Grantees).
  • Be signed in the presence of a notary and one witness.
  • Be recorded with the Clerk of the Superior Court in the county where the property is located.

Notably, the designated Grantee is not required to sign or acknowledge the TODD while the Grantor is alive. This ensures that the property owner retains full control over the asset during their lifetime.

Grantor’s Rights and Revocation of a TODD

While the Grantor is alive, they maintain complete ownership and control of the property. This means they can:

  • Sell or transfer the property at any time.
  • Revoke or modify the TODD as needed.

A TODD can be revoked through:

  1. Executing a new TODD that designates a different beneficiary.
  2. Filing a legally compliant affidavit with the county land records revoking the previous TODD.
  3. Transferring the entire property to another individual during the Grantor’s lifetime.
  4. If a designated beneficiary predeceases the Grantor, their designation is automatically revoked.

Process for Beneficiaries to Claim Property

Upon the death of the Grantor (or the last surviving joint owner if the property is held as Joint with Rights of Survivorship), the beneficiary must take specific steps to claim ownership:

  1. Execute an affidavit confirming the death of the property owner(s).
  2. Indicate whether the beneficiary was the spouse of the deceased owner.
  3. Provide the legal description of the property.
  4. File the affidavit with the Clerk of the Superior Court in the county where the property is located within nine months of the Grantor’s death.
  5. Attach a copy of the Grantor’s death certificate to the affidavit.

Failure to file the required documentation within the specified timeframe results in the TODD becoming ineffective, and the property will revert to the Grantor’s estate.

Impact on a Last Will and Testament

One critical aspect of a TODD is its relationship with a Last Will and Testament. If a valid TODD exists, it overrides any conflicting provisions in the Grantor’s Will regarding the same property.

For example, if John records a TODD designating Jimmy as his beneficiary for his primary residence but later includes a provision in his Will leaving the residence to Susie, the TODD takes precedence. Upon John’s passing, Jimmy will inherit the property, not Susie. However, if Jimmy fails to file the necessary affidavit and documents within nine months, the TODD becomes invalid, and the property will revert to John’s estate. In that case, the property will be distributed according to John’s Will, allowing Susie to inherit it.

Key Takeaways

  • A TODD allows real estate to be transferred without probate.
  • The Grantor retains full ownership and control of the property until death.
  • A TODD must be properly executed and recorded to be valid.
  • Beneficiaries must take action within nine months to claim the property.
  • A TODD overrides any conflicting Will provisions regarding the designated property.

Final Thoughts

The Transfer-on-Death Deed provides a streamlined way to transfer real estate in Georgia without the complexities of probate. However, proper execution and compliance with legal requirements are essential to ensure its validity and to avoid the probate process. Property owners considering a TODD should      consult with a legal professional to ensure it aligns with their overall estate planning goals.