Transfer on Death Deeds: A Simple Solution?

By Jennifer Cona, Esq. Originally published in the August 2024 issue of the Long Island Press, Power of Your Attorney.

Transfer on Death (TOD) deeds just became permissible in New York State.  This allows the transfer of a home to a named beneficiary (or beneficiaries) without Probate of a Will or administration of an estate.

Previously, if an individual wanted to avoid probate regarding real estate, they had to create a living trust.  The TOD deed is an attractive alternative because it is a simpler process and appears to be cost effective.  It may also allow for flexibility in that the TOD deed can be revoked any time prior to the transferor’s death (the transfer is not effective until the death of the transferor).  As such, a TOD deed may be helpful to those with lower income and limited resources, including those whose main asset is residential real property.

However, these deeds have limitations.

Disputed Sales and Closings: The potential for multiple owners and multiple beneficiaries can make a TOD deed very complicated, leading to disputes over the sale of the property.

Asset Protection Planning: A TOD deed is not a Medicaid planning tool; the transferor is still the owner of the property, and it is therefore an asset of that individual for Medicaid planning purposes. Transferring real property to an Irrevocable Trust (five years in advance), or to an exempt person (spouse, caretaker child, minor or disabled child), is still the only way to protect real property for Medicaid purposes.

Estate Recovery: Medicaid recovery and pay-back is limited to estate assets. Unlike assets held in a Trust that are not subject to estate recovery, a TOD deed provides that the property can be brought back into the estate to satisfy creditors.

TOD deeds are new in New York, having just been permitted under the law in July of 2024. As such, you want the experienced Elder Law and Estate Planning attorneys at Cona Elder Law by your side to help you make informed decisions and to navigate the process with you. Contact us at 631.390.5000.

Jennifer B. Cona, Esq. is the Founder and Managing Partner of Cona Elder Law, an award-winning law firm concentrating in the areas of elder law, estate planning, special needs planning, estate administration and litigation, and health care law. The firm has been ranked the #1 Elder Law Firm by Long Island Business News for eight consecutive years.  For additional information, visit www.conaelderlaw.com.