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How a Transfer on Death Deed Works in Florida

Byline profile imageEdited by Jeff White, CEPF®
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Byline profile imageEdited by Arturo Conde, CEPF®
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A transfer on death deed (TODD) offers a streamlined solution for property owners looking to bypass the often lengthy and costly probate process in Florida. This legal instrument allows individuals to designate a beneficiary to inherit their property directly upon their passing, ensuring a smooth transition of ownership. With the ability to retain control over the property until death, and the flexibility to revoke or change the TODD, it presents a compelling option for those seeking simplicity and peace of mind in their estate planning endeavors. For help with a full estate plan, consider working with a financial advisor.

What Is a Transfer on Death Deed?

A transfer on death deed (TODD) is a legal document that allows individuals to designate a beneficiary who will inherit their real estate upon their passing, bypassing the probate process. This can be particularly useful for those looking to facilitate a smooth transition of their property. The primary function of a TODD is to offer a method of transferring property that may be simpler in some circumstances, potentially helping beneficiaries avoid a lengthier and costlier probate process. Unlike a will, which is activated posthumously and requires probate, or a trust, which involves transferring property to a trustee, a TODD is a revocable, non-probate transfer effective only after the owner’s death, providing a flexible and direct approach to estate planning.

The legal framework for transfer on death deeds varies across different states. In Florida, the Florida Uniform Real Property Transfer on Death Act outlines the specific requirements for a valid TODD. These include the necessity for the deed to be recorded before the owner’s death and the owner’s right to revoke the deed at any time. A TODD remains dormant until the owner’s death, allowing the owner to enjoy full control and use of the property during their lifetime. This contrasts with a living trust, where a trustee manages the property, or a joint tenancy, which involves shared ownership and rights of survivorship.

How a Transfer on Death Deed Works in Florida

A man researching how a transfer on death deed works in Florida.

In the state of Florida, a transfer on death deed is governed by specific legal statutes that are outlined in Chapter 732 of the Florida Statutes. Here are three things to keep in mind:

  1. Drafting the deed: The property owner must execute a TODD, which requires a signature in the presence of two witnesses and a notary public.
  2. Recording the deed: The deed must then be recorded with the county recorder’s office in the locality where the property is situated.
  3. Transferring ownership: Upon the property owner’s death, the named beneficiary in the TODD is automatically endowed with ownership of the property, bypassing the need for probate. The beneficiary must present the property owner’s death certificate to the county recorder’s office to validate the change in ownership.

The legal framework for TODDs in Florida is meticulously detailed in Chapter 732 of the Florida Statutes. These statutes delineate the criteria for a valid TODD, stipulating that the deed must be in written form, explicitly identify the real property in question, and be recorded prior to the owner’s death to be effective. It is crucial to adhere to these statutory requirements, as any deviation may invalidate the deed and subject the property to probate.

While TODDs can be beneficial, they are not a one-size-fits-all solution and may not be suitable for every individual’s circumstances. It is important to consult with a legal professional when considering a TODD to ensure that all personal and legal considerations are addressed.

How a Lady Bird Deed Works in Florida

When it comes to estate planning in Florida, property owners have various tools at their disposal for a smooth transition of their assets after their passing. One such tool is the lady bird deed, also known as an enhanced life estate deed. This legal instrument is unique to certain states, including Florida, where it offers a blend of benefits for managing and passing on property.

The concept of a life estate is integral to understanding the lady bird deed. A life estate is a form of property ownership where an individual, known as the life tenant, has the right to use and enjoy the property for the duration of their life. Upon their death, the property passes to a predetermined beneficiary, referred to as the remainderman. However, the lady bird deed takes this concept further by granting the life tenant — also the grantor in this case — enhanced powers to control the property without needing the beneficiary’s consent.

Pros and Cons of a Transfer on Death Deed

A transfer on death deed offers a significant advantage by allowing property owners to bypass the probate process, which is often lengthy and costly. Probate can take months or even years to conclude and may substantially diminish the estate’s value due to legal expenses. With a TODD, property ownership is transferred directly to the designated beneficiary upon the owner’s passing, eliminating the need for probate. Additionally, the property owner retains full control during their lifetime, with the freedom to use, sell, or mortgage the property as desired.

However, while a TODD has clear benefits, it can also present challenges — particularly in cases of joint ownership. If the property is jointly owned, the TODD only becomes effective after the last surviving owner’s death, potentially leading to uncertainty or disputes among beneficiaries. Furthermore, a TODD may affect the owner’s eligibility for Medicaid, as the property might still be considered an asset when determining qualification for benefits. Given Medicaid’s complex eligibility requirements, property owners should carefully assess the potential impact before executing a TODD to avoid unintended consequences.

Bottom Line

Clients meeting with a financial advisor to discuss setting up a transfer on death deed.

TODDs and a lady bird deeds offer unique benefits such as avoiding probate and retaining control over property. While TODDs facilitate a direct, post-mortem property transfer to a designated beneficiary, lady bird deeds provide enhanced control to the grantor, allowing for property management without beneficiary consent. However, these instruments are not without their limitations and complexities, such as potential impacts on Medicaid eligibility and less protection against creditors compared to trusts. 

Tips for Estate Planning

  • A financial advisor can help you with your estate planning needs. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • As you begin the journey of creating your estate plan, consider this estate planning checklist to help you get started on the right track.

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