There are many estate planning tools available in Wisconsin to individuals who want to transfer property without going through the formal probate process. One such tool is a transfer on death (TOD) deed. As the name suggests, this is a deed to real property that names a beneficiary who becomes owner upon the original owner’s death.
A TOD deed allows the real property to pass outside of probate, similar to how a named beneficiary receives a retirement account or other asset with a payable-on-death beneficiary designation. Keep in mind, however, that the beneficiary has no ownership rights under a TOD deed until the owner dies. The owner is free to amend or revoke a TOD deed at any point during his or her lifetime.
Legislature Establishes 120-Day Challenge Period for TOD Deed Transfers
The Wisconsin Legislature recently adopted a series of amendments to the state’s law governing TOD deeds. According to State Rep. Rob Summerfield, one of the proponents of the changes, the newly amended TOD law “creates more flexibility” for property owners “by allowing designated beneficiaries to be named in any document; not solely a [TOD] deed alone.” The amendments also create a clearer procedure for interested parties to contest the validity of a TOD deed. Specifically, the law now provides for a 120-day challenge period following the “death of the sole owner or the last to die of multiple owners.”
As noted by Rep. Summerfield, the current law also does not limit TOD beneficiary designations to the deed itself. Any document that meets certain statutory requirements may serve as proof of the owner’s intentions to effect a TOD transfer. These requirements include:
- Using the terms “transfer on death,” “pay on death,” “TOD,” or “POD”;
- The document is recorded with the register of deeds for the county where the property is located prior to the owner’s death;
- Any required fees are paid.
Finally, the amended law states that the legal test for determining whether the property owner has the legal capacity to make, revoke, or alter a TOD beneficiary designation is the same as that for making or revoking a last will and testament under Wisconsin law.
Contact a Madison Estate Planning Lawyer Today
Although TOD wills are a handy way of passing on your real property without probate, there are situations in which this may not be advisable. As with any estate planning document, you should consult with a qualified attorney before taking any final action.
The estate lawyers of Krause Donovan Estate Law Partners, LLC practice law in the areas of Probate, Wills, Estate Planning, and Trusts. We assist clients in and around Madison, Wisconsin with all matters related to estate planning, trusts, and probate matters. If you would like to speak to one of our experienced attorneys about your estate planning needs, we invite you to request an estate planning consultation.