Washington Transfer on Death Deed Form
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How a Washington TOD deed form works
A Washington TOD deed form is a special type of deed that allows an owner (grantor) of Washington real estate to create a property transfer that will occur on the death of the owner. When the owner dies, the beneficiary named in the TOD deed form automatically becomes the legal owner of the property, without the need for probate. The Washington state legislature first authorized the Washington TOD deed on June 12, 2014.
Washington TOD deed forms are popular because they achieve two goals. First, they allow the owner to transfer property to the beneficiary without going through the probate process, a legal proceeding that can be costly and expensive. Second, they allow the owner to retain control over the property during his or her life. This control includes the ability to sell, mortgage, or lease the property without the consent of the beneficiary. The owner can even revoke the TOD deed without involving the beneficiary. This allows the owner to avoid probate at death without sacrificing control during life.
During the owner’s lifetime, the Washington TOD deed has little effect. The owner can transfer the property to someone else, change the title, or take out loans against the property. The owner can also revoke the transfer-on-death deed or replace it with a different transfer-on-death deed. Any mortgages or other liens against the property remain on the property, and the TOD deed affects no creditors’ rights.
The beneficiary also has no interest in or rights to the property during the owner’s lifetime, even if the beneficiary knows about the TOD deed. The same is true for the beneficiary’s creditors. The property is safe from a beneficiary’s judgment, divorce, bankruptcy, or any other creditor issues. The beneficiary need not know about the TOD deed. Even if the beneficiary knows about the deed, the owner can still deal with the property (or revoke the deed) without involving the beneficiary.
On the death of the owner, the property transfers automatically to the beneficiary or beneficiaries without the need for probate. The beneficiaries take title subject to any mortgages or other claims against the property. The beneficiary inherits whatever interest the owner had in the property at the time of death. No Washington real estate excise tax is due when the owner dies, but the beneficiaries should file an excise affidavit and a certified copy of the death certificate. Once these simple steps are complete, the beneficiaries own the property.
Other names for Washington transfer-on-death deeds
Washington transfer-on-death deeds are also known as TOD deeds or simply as TODDs. In other states—including Arizona—the same type of deed may be called a beneficiary deed. And in Illinois, the same type of deed is called a Revocable Transfer-on-Death Instrument. Each of these titles refers to a deed form that is specifically authorized by state law to transfer property to a beneficiary at an owner’s death without requiring probate.
Although a Washington TOD deed serves the same purpose as a lady bird deed (also called an enhanced life estate deed), each deed is legally distinct. Lady bird deeds are only recognized in five states: Florida, Texas, Michigan, Vermont, and West Virginia. In those states, a lady bird deed is a modified version of life estate deed that divides the property into life estate and remainder interests, but gives the life tenant the ability to revoke the deed. Lady bird deeds are not authorized by statute the way that TOD deeds are. Instead, lady bird deeds were created by attorneys to avoid the perils of traditional life estate deeds.
Benefits of transfer-on-death deeds
A TOD form has several benefits that make it a very popular for Washington property owners that want to avoid probate without sacrificing control:
- Avoiding Probate – Probate is an expensive and often complicated legal proceeding. Using a Washington TOD deed form allows property to bypass the probate process and pass directly to beneficiaries without court or lawyer involvement.
- Retained Control and Flexibility – Some forms of probate avoidance deeds—such as life estates and deeds to joint tenants with right of survivorship—require the owner to sacrifice control. After the deed is signed, the owner cannot sell, mortgage, or otherwise deal with the property without involving the beneficiaries. Washington TOD deeds avoid these restrictions by allowing the owner to deal with the property without the permission or knowledge of the beneficiaries.
- Continuity of Ownership – A Washington TOD deed does not affect the character of the property during the owner’s life. If the property qualifies for state-level tax exemptions—including homestead exemption—the property will continue to qualify for those exemptions. No gift taxes are owed and the property remains eligible for federal tax benefits like the mortgage interest deduction or exclusion on sale of the home.
- Less Hassle and Expense – Many benefits of TOD deeds can also be obtained using a living trust. But a living trust is a more complicated legal strategy that usually involves more hassle. A living trust is also considerably more expensive than a TOD deed. Because of the reduced hassle and expense, TOD deeds are a popular alternative to living trusts.
Situations where transfer-on-death deeds cannot be used
Unlike some states, Washington law allows a TOD deed to be signed by an agent under a valid power of attorney if the power of attorney authorizes the agent to create the TOD deed. This means that an agent under a power of attorney can create a TOD deed on behalf of a legally incapacitated owner if the power of attorney includes language allowing the agent to do so. As with any action under a power of attorney, the agent must act on behalf of the principal and not for the agent’s own benefit.
Washington law is also more generous than some states in that it allows TOD deeds to be used to transfer any type of real estate. In many other states, TOD deeds can only transfer residential property.
A Washington TOD deed cannot be used as a deed in lieu of foreclosure. Neither may it be used if the owner is a business, trust, or any owner other than a living person.
Washington TOD deeds and multiple owners
There are several ways multiple property owners may co-own Washington real estate. The effect of a TOD deed on the joint owners depends on the form of co-ownership.
- Tenancy in Common – If the property is held as tenants in common, a TOD deed by any owner is effective as to the interest of that owner. The deed does not affect the rights of any other owner. The TOD deed will remain in force and, unless revoked prior to the owner’s death, will transfer the deceased owner’s interest to the beneficiaries named in the deed.
- Joint Tenants with Right of Survivorship – Under Washington law, any owner that holds title as joint tenants with right of survivorship has the unilateral right of each tenant to sever the joint tenancy. A TOD deed by only one owner would presumably sever the joint tenancy and have the same effect as a deed by a tenant in common. If all joint tenants sign the TOD deed, then the TOD deed will not be effective until the death of the last joint tenant to die (assuming the last surviving joint tenant doesn’t revoke the deed). Until then, the property is held as joint tenants with right of survivorship.
- Community Property – If spouses hold title as community property, a TOD deed by one spouse will only affect that spouse’s interest in the property. It will not affect the surviving spouse’s interest in the property. If the TOD deed is signed by both spouses, the deed is not effective on the first spouse’s death, but is effective on the second spouse’s death with respect to the second spouse’s interest in the property at the time of his or her death. The same rules apply for community property owned by domestic partners.
See our discussion of Spousal Ownership of Washington Real Estate and Forms of Co-Ownership of Washington Real Estate at Washington Deed Forms for more information about the forms of co-ownership available under Washington state law.
Multiple beneficiaries may also receive the real estate under a TOD deed form. If all beneficiaries survive the owner, the interest transferred to multiple beneficiaries is held in equal, undivided shares with no right of survivorship. On the death of one beneficiary, his or her interest will pass to his or her probate estate. If any of the beneficiaries predecease the owner, his or her interest will instead pass to the remaining beneficiaries.
Relationship of transfer-on-death deed form to warranty of title
Under Washington law, a person who uses a Washington TOD form conveys property to the beneficiary with no warranty of title. The beneficiary who inherits property under a Washington TOD deed takes the property as is. If it turns out that there is a problem with title to the property (for example, if there is an unknown tax lien against the property), the beneficiary cannot sue the original owner’s estate for the title defect.
The lack of warranty of title is not negotiable. Even if an uninformed or ill-advised deed preparer adds a warranty of title to the Washington TOD form, there is no covenant or warranty of title. The attempt at adding a warranty will not be respected.
How to create a Washington transfer-on-death deed form
Washington TOD deeds are authorized by the Uniform Real Property Transfer on Death Act, available at RCW 64.80. That Act includes specific requirements that apply in addition to the requirements of Washington deed forms. Those requirements, which must be satisfied for the deed to be valid, include:
- The deed must state that the transfer to the beneficiary will occur at the owner’s death.
- The deed must meet most requirements that apply to all Washington deeds, including page format, required legal language, and a valid legal description.
- The deed must be recorded before the owner’s death in the public records of the auditor of the county where the property is located. If the TOD deed covers property located in multiple counties, the deed must be recorded in all of those counties.
- The owner must have the same mental capacity as required for a will. This generally requires that the owner understand what he or she is doing by creating the TOD deed; understand the nature and extent of his or her property; understand who would normally inherit the property (“natural objects of bounty”); and understand the relationship between these considerations.
The requirements for a Washington TOD deed form also differs from the requirements for other Washington deed forms. The owner need not notify the beneficiary of the deed, and there is no requirement that the TOD deed be delivered to the beneficiary or that the beneficiary accept the deed during the owner’s life. No consideration is required for Washington TOD deeds.
It is important that each Washington TOD deed meet these requirements. The deeds created by our Deed Generator were attorney-designed to meet the requirements of the Washington Uniform Transfer on Death Deed Act, as well as other requirements of Washington state law.