Monday, November 9, 2009

Transfer on Death Deed

On November 1, 2008, a new law in Oklahoma became effective creating an instrument called a Transfer-On-Death (“TOD”) Deed, which lies at the heart of the Nontestamentary Transfer of Property Act, found in Title 58, of the Oklahoma Statues, Sections 1251 through 1258. The TOD Deed, also known as the Beneficiary Deed, is an attempt to provide a means for transferring property at the time of death without going through the probate process. The TOD Deed, joint tenancies, conveyances with retention of life estates and revocable trusts are all different forms of nonprobate transfers.

The potential problems of the TOD deed are numerous and have not yet been addressed by the Oklahoma courts. There are several concerns and questions in the use of the TOD deed. One of those areas of concern is in the area of joint tenancies. I have been asked if it is a good idea for a joint tenant to use a TOD Deed for property held in joint tenancy?

The short answer is “No.” Although a joint tenant can utilize a TOD Deed, and the new statutes specifically state that “A deed in TOD form shall not sever a joint tenancy”, the grantee-beneficiary will not receive a vested interest in the property unless the grantor-owner is the last to die of all the joint tenants of the property. For example, if there are three joint tenants and one joint tenant is a grantor-owner on a TOD Deed, and that grantor-owner is the first or second of the three joint tenants to die, then the property will pass to the remaining joint tenant(s) and the designated grantee-beneficiary of the TOD Deed will get nothing.

If you have any questions, please do not hesitate to contact our offices.

Law Office of
Todd A. Cone
PO Box 720
Nowata, OK 74048