Bozeman — Montana State University Extension has recently published free information about transfer on death deeds, or TODDs, which allow Montanans to give real property to loved ones without going through a probate process.
Since Oct. 1, 2019, Montana residents have been able to file a TODD on real property, according to MSU Extension educators. Prior to that date, a beneficiary deed was used for this purpose. Beneficiary deeds filed prior to this date are still effective upon death.
“With a TODD you can gift your Montana real property to a designated beneficiary, however the deed is only effective upon your death,” said Marsha Goetting, Extension family economics specialist. “Designated beneficiaries may be your spouse, children, relatives, friends, or nonprofit or charitable organizations. A designated beneficiary has absolutely no ownership rights in your Montana real property until you die and cannot use your home as collateral for a loan.”
The TODD is recorded with the clerk and recorder in the county where a person’s property is located, and all TODDs must include the U.S. mailing address of the designated beneficiary.
Wendy Wedum, MSU Extension Pondera County agent, added that the deed must have a complete legal description of the Montana property that will transfer after death, not the description appearing on the property tax bill sent by the county treasurer.
After a TODD has been signed and recorded, it cannot be revoked by a provision in a person’s will, Goetting and Wedum said. For example, if a parent records a TODD naming their daughter as the designated beneficiary of real property in Gallatin County and later writes a will that leaves that same property to their son, the real property will pass to the daughter under the terms of the TODD. Goetting said if the parent wanted the property to pass to the son, they would need to revoke the TODD or record a new one.
“A TODD is a contract — like payable on death beneficiary designations on financial accounts and transfer on death registrations on stocks, bonds and mutual funds,” Goetting added.
Whether a TODD, will or trust is best depends on an individual’s circumstances.
“Some families may find all three estate planning tools would best meet their estate planning goals,” Wedum said. “Discuss your goals with an attorney to assure you are using the appropriate legal tools for your circumstances. No two families are alike.”
Goetting and Wedum said a TODD must have the complete legal description of the property. If an owner does not have a deed with this description, contact the clerk and recorder’s office where the property is located.
More information on TODDs can be found in the new MontGuide from MSU Extension, https://store.msuextension.org/publications/FamilyFinancialManagement/MT202010HR.pdf.
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