In prior years, it has often been my experience that the only asset remaining in a deceased person’s estate that requires probate is the decedent’s personal residence. As of January 1, 2012, this circumstance can now be eliminated and probate avoided. Illinois has joined 16 other states, including its neighbors Missouri, Indiana and Wisconsin, in adopting a Residential Real Property Transfer Upon Death Instrument (TODI) Act. The Act authorizes owners to transfer their Illinois residential real estate outside of probate using a pre-recorded instrument.
Residential property is defined as real property improved consisting of not less than one nor more than four residential dwelling units, units in residential cooperatives; or condominium units, or a single tract of agricultural real estate consisting of 40 acres or less, which is improved with a single family residence.
With the passage of this Act, it is now possible as part of your estate planning to avoid probate through the use of a transfer on death instrument (“TODI”). Only a natural person, as opposed to a trust, limited liability company or corporation can create a TODI; however, a beneficiary of a TODI can not only be a natural person, but also any legal entity capable of owning residential real estate. The TODI may not be irrevocable, and therefore it can be changed at any time.
Whether you have created a living trust to hold all of your other assets, or have placed some or all of your assets in joint tenancy with right of survivorship, if you maintain sole ownership of your residence, a TODI may be the solution you need in order to avoid the costs and possible delays that a probate proceeding may entail.
If you would like to discuss the possible application of a TODI to your situation, please do not hesitate to contact me.