Utah Transfer on Death Deed Form

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A Utah transfer-on-death deed form (often called a TOD deed form) is a new form of deed authorized by the Utah legislature on May 8, 2018. A Utah TOD deed form works much like a payable-on-death or transfer-on-death designation on a bank account. It allows the property owner to designate one or more beneficiaries to inherit the property at death. A TOD deed form has two primary benefits:

  1. Probate Avoidance – The property described in a TOD deed form passes to the designated beneficiaries without probate. There is no need to hire a lawyer and go through the expense and hassle of a Utah probate proceeding.
  2. Retained Control – A Utah property owner that makes a TOD deed retains complete control over the property during his or her lifetime. The owner can revoke the deed, name different beneficiaries, or sell, mortgage, or convey the property, all without the consent or even knowledge of the designated beneficiaries.

These benefits make a Utah TOD deed form an attractive option for Utah property owners that want to avoid probate without the expense and hassle of a living trust.

Other names for Utah transfer-on-death deeds

A Utah transfer-on-death deed is usually called a TOD deed or simply a TODD. In some states—including Arizona, Arkansas, Colorado, and Missouri—the same deed form is called a beneficiary deed. In others—like Nevada—it is called a deed upon death. And in Illinois, it is called a revocable transfer on death instrument. Each name refers to the same basic deed form created by statute to pass property to beneficiaries at an owner’s death.

A handful of states recognize a similar type of deed called a lady bird deed. Although a lady bird deed often serves the same purpose as TOD deed, the two deeds are based in different sources of law and differ in important ways.

Benefits of transfer-on-death deed forms

A Utah TOD form has several important benefits that make it a popular estate planning tool for Utah property owners that want to leave property to beneficiaries outside of the probate process.

  • Avoiding Probate – As mentioned, probate avoidance is a primary benefit of a Utah TOD deed form. Although a person’s will can leave property to beneficiaries at death, probate is usually necessary to pass clear title to real estate under a will. A TOD deed form avoids probate by creating a nontestamentary transfer, so probate is not required to pass property under a TOD deed form. Utah Code § 75-6-406.
  • Retained Control – An owner that uses a Utah TOD deed form keeps broad control over the property. During the owner’s life, the deed creates no legal or equitable interest in the designated beneficiary. Utah Code § 75-6-412. An owner may always revoke a Utah transfer-on-death deed, even if the deed itself says otherwise. Utah Code § 76-6-406. These benefits allow the owner to keep broad control over the property, including the right to change his or her mind, name new beneficiaries, or sell, mortgage, or lease the property.
  • Continuity of Ownership – A Utah TOD deed form has little effect during the owner’s life. This can have several important benefits: the property continues to qualify for homestead exemption under state law, does not result in a taxable transfer during the owner’s life, and qualifies for a tax basis-step-up at the owner’s death.
  • Less Expense and Hassle Than a Living Trust – Many benefits of a Utah TOD deed form could also be achieved with a living trust. Although there may be situations where a living trust is still a viable alternative, living trusts are more expensive to create and can create more hassle at the owner’s death. By comparison, a TOD deed form provides a less expensive, hassle-free option.

Situations where transfer-on-death deeds cannot be used

There are a few situations where a TOD deed form cannot be used. If the property owner is mentally incapacitated (due to dementia, for example), he or she cannot create a valid TOD deed. The Utah Uniform Real Property Transfer on Death Act requires the owner to have the same mental capacity required to make a will—a higher standard than applies to most contractual arrangements. Utah Code § 75-6-408.

A class gift is a gift to a class of beneficiaries. For example, a gift to “all of my children that survive me” would be considered a class gift. A TOD deed cannot be used to create a class gift. Utah Code § 75-6-405. The beneficiaries must be named in the deed and not simply described by class.

Relationship of transfer-on-death deed form to warranty of title

A Utah TOD deed form conveys real estate with no warranty of title. The beneficiaries that inherit property under a TOD deed take the property “as is” and cannot sue the owner’s estate if there are title problems associated with the property.

The lack of warranty of title is absolute and cannot be overridden by the deed. Even if the deed provides otherwise, a TOD deed form always conveys property with no warranty of title.

TOD deeds and multiple owners or multiple beneficiaries

A Utah TOD deed may be signed by multiple owners. If the owners hold title as joint tenants with right of survivorship, the deed will not become effective until the death of the last surviving owner. If one owner dies but is survived by one or more other owners, the property will continue to belong to the surviving owner or owners with right of survivorship. The deed becomes effective only upon the death of the last owner. If multiple owners hold title as tenants in common, each TOD deed affects only that owner’s interest and there is no right of survivorship.

See the section on “Forms of Co-Ownership of Utah Real Estate” in our discussion of Utah Deed Forms for more information about joint tenancy with right of survivorship and tenancy in common.

If more than one owner makes a TOD deed, the revocation by one owner doesn’t affect the deed as to the interest of the other owner. A deed of joint owners can only be revoked by all joint owners.

A Utah TOD deed may also convey property to multiple beneficiaries. Any interest left to multiple beneficiaries will give the beneficiaries equal and undivided interests in the property without right of survivorship unless the deed provides otherwise. This prevents the owner from leaving different percentage interests to different individuals. It also establishes a default rule that the beneficiaries that inherit the property each hold an interest as tenants in common. Each beneficiary simply inherits a share equal to the interest of each other beneficiary.

The rule just discussed deals with the treatment of beneficiaries who are alive and inherit the property after the owner’s death. A different rule applies to beneficiaries who predecease the owner. Utah law is clear that a beneficiary that dies before the owner receives no interest in the property. The interest of any predeceased beneficiary will instead be transferred to the other beneficiaries in proportion to the interest that the other beneficiaries have in the remaining portion of the property.

How to create a Utah transfer-on-death deed

Utah TOD deeds are specifically authorized by the Utah Uniform Real Property Transfer on Death Act. The Act includes several specific requirements that must be met to create a valid TOD deed:

  • With few exceptions, a Utah TOD deed must meet of the general requirements that apply to Utah deeds.
  • The TOD deed must state specifically that the transfer will occur at the owner’s death.
  • The deed must be recorded before the owner’s death in the public records in the county recorder’s office of the county where the property is located.

Failure to meet these requirements could invalidate the deed or cause problems with recording. The TOD deeds created by our Deed Generator are attorney-designed to meet the requirements of Utah law and to be eligible for recording in all Utah counties. Each deed comes with a set of instructions for completing the transfer with the county recorder’s office.