There is currently legislation pending in the New Hampshire legislature on whether to enact the Uniform Real Property Transfer on Death Act. Commonly known as TOD or Transfer on Death, this is a type of deed by which property owners designate who will inherit their real estate after their death. In states where it is allowed, it can be a useful tool for estate planning because it simplifies the transfer process and avoids the need for probate court.
Will New Hampshire Allow Deeds for Property to be Transferred on Death?
Will New Hampshire became the 20th state to adopt the Uniform Real Property Transfer on Death Act, allowing for the use of transfer on death deeds in real estate transactions? This change would have the potential to impact the way real estate is bought and sold in New Hampshire, and it would be important for both buyers and sellers to understand how the new law works.
Under the new law, property owners would be able create a transfer on death deed that names one or more beneficiaries who will inherit the property upon the owner’s death. The deed must be signed and notarized, and it must be recorded with the county registry of deeds where the property is located. The transfer on death deed does not take effect until the owner’s death, so the owner retains full control of the property during their lifetime.
Benefits of a Death Deed Transfer
One of the main advantages of using a transfer on death deed is that it allows the property to pass directly to the designated beneficiaries without going through probate court. Probate court is a legal process that is required when someone dies without a will or with assets that are not automatically transferred to beneficiaries. This process can be time-consuming and expensive, and it can delay the transfer of assets to heirs. By using a transfer on death deed, the property can be transferred quickly and efficiently to the designated beneficiaries, without the need for probate court.
Using a transfer on death deed allows the property owner to retain control of the property during their lifetime. This means that the owner can continue to live in the property, rent it out, or sell it without the consent of the designated beneficiaries. The beneficiaries have no legal rights to the property until the owner’s death.
When a transfer on death deed is used in a real estate transaction, it is important for both the buyer and seller to understand the implications of the deed. If the seller has created a transfer on death deed, the buyer should be aware that they will not have legal ownership of the property until the seller’s death. This means that the buyer will not be able to sell the property or take out a mortgage on it until they become the legal owner. If the buyer is planning to use the property as collateral for a loan, they should make sure that the lender is aware of the transfer on death deed and is willing to work with them.
On the other hand, if the buyer is purchasing a property from a seller who has created a transfer on death deed, they may be able to avoid probate court when the seller passes away. Probate court can be a lengthy and expensive process and is extremely emotional for the family left behind. However, the buyer should be aware that they will need to wait until the seller passes away before they can take legal ownership of the property.
A transfer on death deed does not protect the property from creditors or Medicaid. If the property owner incurs debts or requires Medicaid assistance during their lifetime, the property may be subject to liens or claims against it. In addition, if the designated beneficiaries are minors or incapacitated adults, a guardianship or conservatorship may need to be established to manage the property on their behalf.
While a transfer on death deed is not as robust a planning tool as a revocable living trust, in some instances it could be an effective substitute.
If enacted, the Uniform Real Property Transfer on Death Act would allow property owners in New Hampshire to create transfer on death deeds that designate who will inherit their real estate after their death.
If you have questions about estate planning, contact our experienced New Hampshire Estate Planning attorneys. We work with couples and individuals from all walks of life and are committed to ensuring you and your family are taken care of regardless of what life may throw your way.
It looks like the bill to enact the Uniform Real Property Transfer on Death Act was killed on 30 March 2023 as it has been for the past 2 years. Shouldn’t your article say that? Thank you.