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THE BEST WAY TO TRANSFER YOUR HOME UPON DEATH . . . A TODI? (Transfer on Death Instrument)

By:  Chad A. Ritchie, Esq. 

Illinois now allows people to transfer ownership of their home through what is called a "Transfer on Death Instrument" or "TODI" (pronounced like "Toady") for short. A TODI is a deed-like document that is recorded while the homeowner is alive which allows their home to be automatically transferred upon their death. A homeowner can revoke a TODI while they are still alive. The best thing is that a home transferred by a TODI AVOIDS PROBATE.


Below is a Q&A that will help explain what a TODI is, how it works and whether it is something that would be good for your estate plan.


1. Question: What is a TODI?


Answer: In simplest terms it is a document that can be recorded in Illinois that allows a homeowner to transfer their home to people upon the homeowner's death. Think of this as a document that allows you to name beneficiaries for your house. IMPORTANT: TODI's only allow people to transfer their residence at death - not investment property or other property the homeowner is not actually living in.


2. Question: Why would someone need or want to have a TODI?


Answer: The main reason someone would consider using a TODI is so that their home can avoid having to go through probate when they die. If real estate is owned by a single individual at the time of their death, then that property is generally considered a "probate asset" that would require probate to be filed in order to transfer that asset into the names of the people that are supposed to inherit it through a person's Will or by Illinois law (if there is no Will.)  A lot of times a person's only probate asset is their home. If that is the case, probate can be avoided if a TODI is used. 


3.  Question: What is Probate?


Answer: Probate is a court proceeding that allows assets of someone who died to be transferred to their heirs. Probate itself is a court proceeding that takes about 9 months to a year to complete if there are no complications. Probate is a public proceeding and generally requires an attorney to represent the estate to make sure everything is done right. Most people want to avoid probate to avoid the costs, fees and time delay associated with probate.


4. Question: How does a TODI work to avoid probate?


Answer: A TODI is a document that is a mix between a deed and a will. The TODI contains the legal description of the Property being transferred (like a Deed) and the TODI must be signed and witnessed in the same manner as a Will.  Once the TODI is signed by all of the owner and properly witnessed and notarized, then it must be recorded in the County where the Property is located. The TODI designates who should inherit the Property when the owner dies. If there are joint owners, then the property passes to the beneficiaries of the TODI when the second joint owner dies. The beneficiaries don't have to do anything in order to accept the Property upon the owner's death - they automatically inherit the Property - however, the beneficiaries do have the right to reject the ownership of the Property within a certain amount of time of the owner's death.


5.  Question: How does an owner revoke a TODI that they previously signed and recorded.


Answer: An owner can revoke a TODI by following these 3 steps:


Step 1: Have a written document prepared that specifically revokes the previously recorded TODI. ("Revocation Document")


Step 2: The Revocation Document is properly signed, witnessed and notarized.


Step 3: The Revocation Document is recorded prior to the owner's death. Note that the Revocation is not effective until it is recorded. Question: What type of person would most likely benefit from an Illinois TODI:


6.  Question:  How do I know if a TODI is right for my estate plan? 


Answer:  A TODI can be a simple and effective way to avoid probate without needing a trust.  Everyone's estate plan is different and a TODI may not be a good fit for everyone.  I have a short video that shows examples of when a TODI may or may not be a good tool to use to avoid probate.  For instant access to my video enter you information in the sign up box below and I will e-mail you a link to the Free Webinar.


You can also call my office at (309) 662-7000 and we would be glad to talk to you about any questions you have about TODI's. 




Chad A. Ritchie
Ritchie Law Office, Ltd.
2409 E. Washington Street, Ste. C
Ph: (309) 662-7000
Fax: (309) 662-4369

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