The Law Q&A | TODI another way to avoid probate

The Law Q&A | TODI another way to avoid probate

By BRETT KEPLEY

Last week we mentioned an exception to the necessity for opening a probate case in court when owning real estate at time of death. Under Illinois law, the exception is a TODI (pronounced "toady").

No, it's not a drink. Nor is it your columnist who, some have suggested, is a toady.

Rather, it is a "transfer on death instrument."

This document allows ownership of land to be transferred to others upon the owner's death without probate. It must be signed by the owner; the owner's signature must have been witnessed by two or more persons; and all signatures must be notarized.

The TODI must identify the property to be transferred (a legal description) and identify the persons or entities to whom the owner wishes the property to go to upon the owner's death.

The only lands transferable through a TODI are residential, including condominium ownership, or a single tract of agricultural real estate of 40 acres or less with a home on it. The residential property can't have more than four dwelling units.

After being filled out and signed, the TODI must be filed in the recorder's office of the county where the real estate is located.

Can the owner revoke or change the TODI after signing and filing such document? You bet. But the owner must file another TODI that makes the change, or file a document signed just like a TODI that simply revokes the filed TODI in question.

After filing a TODI, an owner can still treat the land as any owner might: sell it, lease it, mortgage it, etc. If at death the owner had no ownership in the identified real estate, the TODI is ineffective to transfer that property — in effect, there's nothing to transfer.

A TODI trumps a will. So if you make a will to leave the house to your kid, but before death you filed a TODI leaving it to your lawyer, the lawyer gets it.

If the person designated to get the property dies before the owner (or a business designated to get the property is no longer in legal existence at owner's death), or the taker declines to take the property ("disclaims"), and there are no secondary persons or entities designated in the TODI to take, the property goes back into the decedent's estate and must be probated. So don't just leave it to your lawyer; leave it first to your lawyer and then to your kid if the lawyer predeceases you or disclaims.

However, if the only designated taker was a descendant, and he/she dies leaving descendants (in effect grandkids or great grandkids of the owner), those descendants automatically become the takers of the property unless the TODI instructs otherwise.To notify the world of the transfer after the owner's death, a notice of death affidavit should be filled out, but is not required, and filed in the recorder's office by the taker.There you have it — a TODI as another clever device to avoid probate.

As reported by someone who is NOT a toady (unless my publisher says it's OK for me to be one).

Brett Kepley is a lawyer with Land of Lincoln Legal Assistance Foundation. Send your questions to The Law Q&A, 302 N. First St., Champaign, IL 61820. Questions may be edited for space.