What Is a Transfer On Death Instrument (TODI), And Why Would I Need One?

We previously mentioned some new laws for 2012, but one that we didn't mention was the new Transfer on Death Instrument (TODI) that went into effect on Jan 1, 2012. The TODI isn't anything particularly revolutionary, but it is an important tool to consider in your Advanced Care/ Estate Plan.

What is a TODI?

The Transfer On Death Instrument is just one of the tools that allows you to pass on residential property at death. It is very much like a having a Payable on Death (POD) on your bank account, except the TODI is used to transfer residential real estate. In Illinois, the TODI can be used to transfer most pieces of residential real estate to another person upon death.

Why would I need a TODI?

The TODI is another option to use in your Advanced Care Planning. A TODI allows you to transfer real property, such as your home or vacation residence, outside of probate. Probate is a long and often costly process that many people wish to avoid. In Illinois if you own real property that is not transferred at death, you cannot avoid probate. A TODI can help you avoid this process by transferring the property and helping you avoid probate.


What is the difference between a TODI and regular deed?

The Main differences between a TODI and a deed are:

1. Effective Date- A Deed is effective as of the date listed on the deed, a TODI only takes effect at the death of the owner.
2. Requirements- Usually to make an inter vivos gift you would need to have notice and delivery of the instrument. A TODI does not require notice and delivery. However, a TODI does require that the beneficiary of a transfer accept the property that was given to them.
3. Consideration- Usually a deed requires some amount of money to be given for the transfer (i.e. consideration). On a deed this is usually a nominal sum like $10. But a TODI doesn't require any consideration, therefore nothing has to be exchanged

But remember, even thought notice and deliver are not required, you still must record the TODI with the county recorder before the death of the person granting the transfer.

Can I revoke the TODI later?


Yes! TODI's are revocable instruments, meaning that you can cancel them at any time. But to do so you will need to draft another TODI or some other instrument that specifically revokes the original TODI.

Can I get a TODI online?

A TODI is a legal document, like a deed, and you should have a lawyer draft it for you. There are very specific legal requirements for a TODI, for example, the TODI must give a legal description of the property to be transferred. There are other technical legal formalities with property transfers like the TODI that your attorney should discuss with you.

If you need a TODI or any other estate planning document prepared, you should call the Crosby Law Firm today at 815-397-2006 or click on our Free Consultation Center. We can provide you with a complete Advanced Care Planning solution.