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Transfer on Death Deeds vs. Living Trusts

When you are wanting to keep your real estate out of probate, you could be weighing the pros and cons of utilizing a transfer on death deed instead of a revocable living trust.

Transfer on death deeds (occasionally also referred to as a beneficiary deed) has a much more limited concentration than a living trust. A TOD deed can designate a beneficiary to inherit your real estate when you pass away, whereas a living trust can designate beneficiaries for many other kinds of property too (such as financial institution accounts and tangible belongings). Below are a couple factors to take into account if you’re trying to choose between transfer on death deeds and living trusts.

  • Transfer on Death Deeds vs. Wills

Why not utilize a will? You can certainly utilize a will to leave your real estate behind to loved ones, but a will is not going to bypass probate. Typically, property you are leaving behind with a will is going to enter probate proceedings. Probate is costly and time consuming, so a lot of people are anxious to avoid it, particularly when it comes to a considerable asset such as real estate.

1. Transfer on Death Deeds Are Not Available in Every State

Not all states enable you to create a transfer on death deed, first and foremost you’ll going to have to find out if TOD deeds are available in the state the real estate is located in. Over half of the US allows TOD deeds. The applicable state to look up is the one in which it’s located, and not the state you presently live in.

  • For Instance: Bob owns a house in California but now is a resident of Colorado. He wants to devise a TOD deed to leave it to his daughter. He would devise a California TOD deed, not one for Colorado.

If your state doesn’t presently allow TOD deeds, it could possibly later.

2. TOD Deeds Are Less Costly and Less Complex Than Living Trusts

Transfer on death deeds are a simplified document that specifies the owner of the real estate, the legal details of the real estate, and the beneficiaries that are going to inherit the property when the current owner passes away. TOD deeds tend to be straightforward (and therefore somewhat affordable) to create. Many states supply example language for their TOD deeds in their laws; these guides are referred to as “statutory forms.”

Nevertheless, living trusts are prone to be more complicated in setting up. When using a lawyer to devise your living trust, the expense is going to typically be a lot higher than using a lawyer to devise a straightforward TOD deed.

With each a transfer on death deed and a living trust, you are going to need to file the document with the property records office in the county in which your real estate is located. However, with trusts, you are also going to have to take additional steps to re-title certain property in the designation of your trust. Furthermore, when you obtain newer property that you with to add to the trust, you are required to not forget to legally transfer it into your trust. To put it another way, living trusts usually require more upkeep as well.

It’s also easier to rescind or alter a transfer on death deed than it is for a living trust. To rescind a TOD deed, you just sign, notarize, and file either a revocation of the TOD deed or a newer TOD deed that will replace the initial one. Trusts can be more complex to amend or resolve.

3. Trusts Do More Than Transfer on Death Deeds Do

When your real estate is the most significant asset you have, and a lot of your other property is going to transfer to your inheritors without probate anyway (by other probate-bypassing methods), then it might be a good idea to use a simple TOD deed to avoid your real estate going through probate.

However, if you have considerable assets in addition to real estate that you wish to safeguard from the costs and hold ups of probate, then a living trust can provide a single solution.

Trusts Hold More Than Real Estate, and They Designate Trustees to Oversee the Property

Living trusts are more adaptable and impactful than TOD deeds. Again, they can hold property in addition to real estate. Furthermore, trust documents designate individuals to act as “trustees”— individuals that oversee the trust property.

You additionally designate a “successor trustee.” Following you passing away or becoming incapacitated, the successor trustee is going to step in to oversee the property and allocate it to your beneficiaries. This additional oversight can be very beneficial.

Trusts Can Offer More Oversight for Property You Leave for Minors

When you have minor children, the trustee (or successor trustee) can take manage the trust property until they reach a certain age.

This enables your trustee to oversee property for your child(ren)—and use their carefulness to expend the trust assets for the child’s health care, support, and schooling—until the child reaches a certain age (up to 35 years).

As an alternative to the child’s sub trust, you can designate a “custodian” to oversee real estate for minor child(ren), but the property is required to be turned over to your child once the child reaches the age declared by your state through its Uniform Transfers to Minors Act. This state-chosen age is usually 21, which some individuals may consider too young to be in charge of larger assets such as real estate.

Trusts Can Plan for Debilitation

When you anticipate or are concerned about becoming debilitated, you might want to choose a living trust. Different from a TOD deed, the living trust can designate a successor trustee to manage the trust property should you become debilitated. When you choose a TOD deed instead, think about also devising a durable power of attorney that designates an “agent” or “attorney in fact” that can manage your financial issues on your behalf should you ever be unable to manage them yourself.

Trusts are also able to assist in a wide variety of other circumstances. When you have more complex circumstances, an estate planning lawyer can help you devise a trust that fulfills your unique needs.


  1. Jennie Lin, A. (2022, February 28). Transfer on death deeds vs. living trusts. www.nolo.com. Retrieved April 14, 2022, from https://www.nolo.com/legal-encyclopedia/transfer-on-death-deeds-vs-living-trusts.html

Arizona Family Law

Regardless of the choice you make, it’s important you make the best choice for you when hiring an attorney. Remember: The decisions you make now can affect your future. Ultimately, choosing the best lawyer will depend on which lawyer feels best for you and your situation.

If you want to learn about Michelle N. Ogborne and see if she is the right attorney to represent you in your collaborative divorce in Arizona, contact us today!

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