What Is an Alaska Transfer-on-Death (TOD) Deed?
An Alaska transfer-on-death deed—also called a TOD deed or beneficiary deed—is a deed form used to transfer Alaska real estate upon the property owner‘s death. When the owner dies, the real estate automatically transfers to the beneficiaries named in the Alaska TOD deed.
The Alaska Uniform Real Property Transfer on Death Act (“AURPTDA”) authorizes Alaska TOD deeds.1
What Is the Purpose of an Alaska TOD Deed?
An Alaska TOD deed avoids a legal proceeding called probate that is usually needed to transfer real estate from the deceased owner to the heirs. Because probate can be expensive and lengthy, many estate plans try to avoid probate when possible.
Under Alaska law, a transfer of real estate under an Alaska TOD deed is nontestamentary, which means real estate subject to a valid TOD deed automatically transfers to beneficiaries when the owner dies.2 Instead of navigating probate proceedings, beneficiaries of a TOD deed need only file a survivorship affidavit or similar document in the land records to indicate that the owner is deceased.
What Types of Property Can Be Transferred Using an Alaska TOD Deed?
Alaska law does not restrict the real estate interests that an Alaska TOD deed can transfer. Alaska’s TOD deed statute broadly defines property transferable through a TOD deed to include “an interest in real property located in this state which is transferable on the death of the owner.” 3 The property must be real property—that is, real estate. An Alaska TOD deed cannot transfer automobiles or mobile homes, which are not real estate.
What Is the Effect of an Alaska TOD Deed While the Owner Is Alive?
As the name suggests, an Alaska TOD deed takes effect at the owner’s death. While the owner remains living, a TOD deed has little consequence. Alaska law is clear that—during the owner’s life—a TOD deed does not:
- Affect the owner’s interest in the property or prevent the owner from transferring or mortgaging the property;
- Give any rights to the named beneficiary, even if the beneficiary knows about the TOD deed;
- Affect any interest or right of a secured or unsecured lender, even if the lender knows about the TOD deed;
- Affect the owner’s or the beneficiary’s eligibility for Medicaid or other forms of public assistance;
- Create any legal or equitable interest in the beneficiary; or
- Allow a beneficiary’s creditors to file claims against the property.4
These features make an Alaska TOD deed practically ineffective during the owner’s lifetime. The owner can revoke the deed, sell or mortgage the property, or otherwise deal with the property freely—without the consent or involvement of the named beneficiaries. A property owner can revoke an Alaska TOD deed even if the deed states that it is irrevocable.5
[callout]The owner’s right to manage the property without beneficiary involvement distinguishes an Alaska TOD deed from a life estate deed, which requires each beneficiary’s consent to sell or mortgage the property. [/callout]
What Is the Effect of an Alaska TOD Deed on the Death of an Owner?
When the owner dies, real estate subject to an Alaska TOD deed transfers to the designated beneficiary as described in the deed.6 The property need not become part of the deceased owner’s estate. The beneficiaries receive the real estate subject to any outstanding mortgages, liens, or other third-party interests in the property.7
Can an Alaska TOD Deed Leave Property to Multiple Beneficiaries?
If an Alaska TOD deed names multiple beneficiaries, the default rule is that each beneficiary receives an equal and undivided share with no right of survivorship.8
Example: A TOD deed names Adam and Barbara as beneficiaries. Both Adam and Barbara outlive the property owner. Upon the owner’s death, Adam and Barbara each receive an undivided 50 percent interest in the property, with no right of survivorship.
An owner can change the default rule by including language in a TOD deed specifying a different manner for multiple beneficiaries to own the property.9
Can Joint Owners Sign an Alaska TOD Deed?
If two or more owners own Alaska real estate, the effect of a TOD deed depends on whether the property is owned with a right of survivorship. If multiple owners hold title with right of survivorship, a deceased owner’s interest automatically passes to surviving owners upon the deceased owner’s death—regardless of what a TOD deed says.10 When the last surviving owner dies, the TOD deed becomes effective—provided the last surviving owner signed the TOD deed.11
Alaska law recognizes several forms of joint ownership with right of survivorship, including tenants by the entirety and community property with right of survivorship.12 However, the Alaska Legislature abolished joint tenancy with right of survivorship—a co-ownership form with right of survivorship recognized in most states.13
If Alaska real estate is held jointly without right of survivorship—such as if the property is owned as tenants in common or community property without right of survivorship—a TOD deed transfers each owner’s separate interest when that owner dies.14
What Happens if the Beneficiary Named in an Alaska TOD Deed Dies Before the Owner?
A TOD beneficiary’s interest in real estate is contingent on the beneficiary surviving the owner.15 If a beneficiary dies before the owner, that beneficiary’s interest lapses, which means the transfer-on-death provisions are not operative. There are three exceptions to this rule:
- Alaska law allows a TOD deed to prevent lapse by including provisions that specify a different result if a beneficiary dies before the owner.16
- A TOD deed may name an alternate beneficiary to receive a deceased beneficiary’s share.17
- If a TOD deed names multiple beneficiaries and one beneficiary’s share lapses, the lapsed share transfers to the remaining beneficiaries in proportion to their interests in the remaining jointly-owned part of the property.18
In practice, it is best for Alaska TOD deeds to specify precisely what happens when the owner dies. This precision requires custom language in the Alaska TOD deed form.
Must the Owner Notify the Beneficiaries of the Alaska TOD Deed?
Alaska law does not require a property owner to notify the beneficiary of an Alaska TOD deed. The statute clearly states that an Alaska TOD deed is effective without notice or delivery to, or acceptance by, the beneficiary during the property owner’s life.19
Can an Alaska TOD Deed Be Used When the Property Is Mortgaged?
An Alaska TOD deed can convey mortgaged property. The Garn-St. Germain Depository Institutions Act of 198220 limits a bank’s ability to enforce due-on-sale clauses—which make a mortgage payable in full upon transfer of the property. Under the federal statute, a bank or other mortgage company cannot use a due-on-sale clause to penalize “a transfer to a relative resulting from the death of a borrower.” 21
Must an Alaska TOD Deed Be Recorded?
Alaska’s TOD deed statute requires TOD deeds to be recorded before the property owner’s death.22 A TOD deed must be recorded in the office of the recorder for the recording district where the property is located. Failure to properly record an Alaska TOD deed invalidates the deed.
Can an Alaska TOD Deed be Signed By an Agent Under a Power of Attorney?
An agent under a power of attorney cannot sign an Alaska TOD deed on behalf of a mentally incapacitated owner. The capacity required to make or revoke a TOD deed is the same as the capacity required to make a will.23 If an owner could not make a valid will, the owner cannot sign an Alaska TOD deed—regardless of a power of attorney.
What are the Requirements for an Alaska TOD Deed?
An Alaska TOD deed must meet several specific requirements:24
- It must satisfy all essential elements and formalities of Alaska deeds generally, including page formatting and margin requirements, identification of relevant persons, a legal description of the property, and related requirements;25
- It must state that the transfer to the designated beneficiary is to occur at the transferor’s death;
- It may not use a beneficiary designation that only identifies beneficiaries as members of a class (for example, my children or my grandchildren—a TOD deed that only identifies beneficiaries as members of a class is void); and
- It must be recorded in the recording district where the property is located before the property owner’s death.
- Alaska Statutes, Title 13, Chapter 48 (AK ST §§13.48.010, et. seq.).
- AK ST §13.48.030.
- AK ST §13.48.190(5).
- AK ST §13.48.080.
- AK ST §13.48.020.
- AK ST §13.48.090(a)(1).
- AK ST §13.48.090(b).
- AK ST §13.48.090(a)(3).
- AK ST §13.48.090(a) (“Except as otherwise provided in the transfer on death deed . . .”).
- AK ST §13.48.090(c). See also AK ST §34.15.140.
- AK ST §13.48.090(c).
- AK ST §34.15.140; AK ST §34.77.090(d)(3).
- AK ST §34.15.130.
- AK ST §13.48.190(3).
- AK ST §13.48.090(a)(2).
- AK ST §13.48.090(a) (“Except as otherwise provided in the transfer on death deed . . .”).
- AK ST §13.48.090(a)(5).
- AK ST §13.48.090(a)(4).
- AK ST §13.48.060.
- 12 USC 1701j-3(d).
- 12 USC 1701j-3(d)(5).
- AK ST §13.48.050(4).
- AK ST §13.48.040.
- AK ST §13.48.050.
- See AK ST §40.17.030; AK ST 34.15.010.