Wisconsin Transfer on Death Deeds: Avoid or Minimize Probate
Usually, when an estate is opened to probate the assets of the deceased, all the assets are subject to probate, including real estate. In many estates, real estate is the only significant asset, perhaps because other assets, such as bank accounts, retirement accounts, life insurance, and other financial accounts had a beneficiary designated. Property that has a beneficiary named passes to the beneficiary and the asset avoids probate.
In 2006, the Wisconsin legislature enacted and the Governor signed into a law a bill that created the Transfer on Death Deed, which allows for nonprobate transfer of real estate at death. It allows an individual to name a beneficiary or beneficiaries to receive the real estate without the property going through probate.
What Is The Purpose Of A Transfer On Death Deed?
Unlike a traditional deed, where the individual transfers the real estate to another at the time the deed is signed, the Transfer on Death deed is NOT a conveyance, or transfer, of the real estate at the time that the TOD deed is signed or recorded. Rather the individual retains ownership of the real estate until the individual dies. See below for more information on what happens when the individual dies. Because there is no transfer, the individual is still free to change the beneficiary at any time and even free to sell the property.
What Deed Form Is Used For A Transfer On Death Deed?
Although there is not a mandatory deed form for a TOD deed, a valid TOD deed needs to clearly specify several things, including: the name of the deed is "Transfer on Death Deed," the granting language should indicate a transfer on death, and the deed should have a separate notation that the deed is drafted pursuant to Wis. Stats. § 705.15. This deed must be recorded to be effective.
What Happens When The Grantor Dies?
From a technical standpoint, the actual transfer of the real estate to the TOD beneficiary occurs immediately upon the death of the individual. From a practical standpoint, however, a form is often prepared and recorded with the local Register of Deeds that states that the individual has passed away. The beneficiary then formally receives the interest in the real estate.
Using a Transfer on Death Deed in Wisconsin can help you reduce or avoid the burden of probate. Before deciding to use one, however, you should consult with an experienced attorney to determine if such action would be beneficial, taking into consideration factors including costs, value of the estate, likelihood of disputes, and other factors.