Transfer on Death Instrument for Illinois Real Estate

What you need

Gather these before the document is drafted.

• Your current deed, so the legal description and the way you hold title are copied exactly.
• The full legal names of each beneficiary, and a backup if a beneficiary dies first.
• Two credible witnesses who will sign and a notary public. None of them should be a beneficiary or the spouse of one.
• The instrument itself, written with the form of a recordable deed.
• Filing with the recorder of deeds in each county where any part of the property sits, before the owner's death.

What the Act says

The Real Property Transfer on Death Instrument Act is 755 ILCS 27. Section 20 lets an owner transfer real property by this instrument to one or more beneficiaries, effective at the owner's death. Section 30 labels the instrument nontestamentary, so it passes property outside your will, and it cannot be admitted to probate as a will.

Section 40 sets the requirements. The document must contain the essential elements and formalities of a properly recordable deed, though it need not state a price or the addresses of the beneficiaries. It must be signed, witnessed, and acknowledged under section 45. It must say that the transfer happens at the owner's death. And it must be recorded before the owner dies. The statute adds that failing any requirement makes the instrument void and unable to transfer title.

Witnesses, notary, and recording

Section 45 requires the owner to sign, or have someone sign in the owner's presence at the owner's direction. Two or more credible witnesses attest in writing that the owner signed in their presence, that the signing was the owner's free and voluntary act, and that they believed the owner to be of sound mind and memory. Then the signatures of the witnesses and the owner are acknowledged in front of a notary public.

A document with fewer than two credible witnesses is void. If a beneficiary or the beneficiary's spouse witnesses it, that beneficiary's gift is void unless enough other witnesses and the notary also attest, subject to a small exception for the share the person would have received anyway.

Recording is the step that is easiest to forget. Section 40(a)(3) says the instrument must be recorded before the owner's death in the public records of the recorder's office in the county or counties where any part of the real property is located.

What it does while you are alive

Almost nothing changes. Under section 60, the instrument does not affect your right to sell, transfer, or mortgage the property, and does not give the beneficiary any legal or equitable interest. The beneficiary does not need to be told or to accept. Section 50 says notice, delivery, acceptance, and payment are not required.

Because the instrument has no effect until death, a lender or buyer is not bound by it. If you sell the property, the sale controls.

Changing or canceling it

Section 25 says the instrument is revocable. Section 55 limits how. A recorded instrument can be revoked only by a new transfer on death instrument or an instrument of revocation. That document must be signed, witnessed, and acknowledged the same way, be dated after the one it replaces, and be recorded before your death. A revocatory act on the document, an unrecorded paper, or a provision in a will does not revoke it.

Section 35 adds a rule for powers of attorney. Even if authorized, an agent under a durable power of attorney cannot create or revoke a transfer on death instrument for you. Your agent can still sell or mortgage the property under the power of attorney. See power of attorney for property. The capacity needed to make or revoke the instrument is the same as for a will.

What happens at death

Under section 65, the property goes to the beneficiary named in the instrument, who can disclaim it. With two or more beneficiaries, they take equal undivided shares with no right of survivorship, unless the instrument says otherwise. If a single beneficiary does not survive you, the property passes to your estate. If the beneficiary who dies first is your descendant, that person's living descendants take the share. The property comes with any mortgage or lien on it. A beneficiary can record a notice of death affidavit in the county to confirm title, and section 75 says the transfer does not depend on filing it.

Your surviving spouse may renounce the instrument unless the right was waived. If renounced, the spouse is entitled to one-third of the property if you leave a descendant, and one-half if not. The renunciation must be filed within 7 months after the death, or a longer period if a court allows. Anyone who wants to contest the instrument must start within the earlier of two years after the death or six months after letters of office are issued in probate.

Who prepares it

Section 95 says the instrument is to be prepared only by a licensed attorney, though a self-prepared one is not void for that reason. Because mistakes in recording, in the legal description, or in witnessing can void the whole instrument, many owners have Jeff prepare it. It is also a planning choice. Compare it with a living trust and with the deed options Jeff handles for real estate.

Reviewed by Jeff McCarthy, Attorney, Inspired Law Group, 136 E 9th St, Lockport, IL 60441.