Transfer on Death Deed Now in Illinois

On January 1, 2012, the Illinois Uniform Real Property Transfer on Death Act (Act) goes into effect. The Act permits owners of real property in Illinois to execute a deed which will allow for the property to be transferred to a designated beneficiary upon the owner’s death. If the property is owned jointly, the deed will transfer ownership upon the death of the second owner to the designated beneficiary.

The Transfer on Death Deed varies from its counterpart in other states in that it requires the deed to be executed with the formality of a Last Will and Testament. The deed must be witnessed by two witnesses, notarized, and the witnesses must attest that the person signing the deed is of sound mind. The deed requires certain language such as that it is not effective until the death of the owner and must be properly recorded before the death of the owner.

Prior to the enactment of the Act, owners of real property were forced to have a trust in order to avoid probate of real property, even if the owner’s situation did not warrant having a trust. Also, the Transfer on Death Deed allows for property to be maintained in joint names with a spouse which is a great form of asset protection against the creditors of one spouse.

The Transfer on Death deed will permit greater flexibility in estate planning and cost-effective probate avoidance.