Indiana Transfer on Death Deed Form

An Indiana TOD deed form allows Indiana property owners to achieve two goals.

• It allows the owner to avoid probate at death. Upon the owner’s death, the property passes automatically to the beneficiaries named in the deed, without the need for Indiana probate.
• It allows the owner to retain control during life. If the owner wants to name new beneficiaries, transfer or lease the property to someone else, or even revoke the deed, he or she may do so freely and without involving the beneficiaries.

These features make a TOD form a popular estate planning tool in Indiana. Since Indiana first authorized TOD deeds on July 1, 2009, TOD deeds have become a popular alternative to living trusts due to the cost savings and simplicity they offer.

Like other Indiana deed forms, a TOD deed transfers Indiana real estate. But unlike most other types of deeds, the TOD does not become effective until the owner’s death. Until the owner dies, he or she keeps complete control over the property. At death, the TOD deed becomes effective to transfer the property to the designated beneficiaries.

Unlike some other Indiana deed forms, a TOD deed does not require consideration and need not be delivered or even reported to the beneficiary. The deed may leave property to a trust, allowing the property to ultimately end up in a living trust if that is the owner’s intent.

Benefits of transfer-on-death deeds

Indiana TOD deeds offer several important benefits that contribute to their popularity as an estate planning tool. These benefits include:

• Probate Avoidance – A TOD deed allows the property to pass to the beneficiaries named in the deed without going through Indiana probate. Indiana law has a $50,000 limit on nonprobate transfers using the small estate procedure. The TOD deed can be used even if the value exceeds $50,000. Depending on the circumstances, it can lower the remaining estate value to under $50,000, allowing the entire estate to pass outside of probate.
• Retained Control – A person who makes a TOD deed keeps complete control over the property. He or she can revoke the deed, change the beneficiaries, or sell, mortgage, or lease the property. The beneficiary does not have to consent and need not know that the TOD deed even exists.
• Continuity of Ownership – A TOD deed does not change the character of the property in the hands of the owner. The property continues to qualify for any state and federal tax benefits, including homestead exemption, the capital gains exclusion for sale of a principal residence, and the federal gift tax exemption.
• Savings in Legal Fees and Costs – As mentioned above, a living trust can also provide many of the same benefits as a TOD deed. But living trusts can be expensive to set up and complicated to administer after death. A TOD deed is a low-cost, low-hassle alternative to a living trust.

Other names for Indiana transfer-on-death deeds

Although the legal name under Indiana law is transfer-on-death deed, these deeds may also be called TOD deeds or simply TODDs. In other states, a similar deed form may be called a beneficiary deed (in Arizona, for example), deed upon death (in Nevada, for example), or transfer-on-death instrument (in Illinois). Each of these names refers to the same type of statutorily-created deed that transfers property at an owner’s death without requiring probate.

An Indiana life estate deed form may also transfer Indiana real estate at death without going through probate. But life estate deeds have their own drawbacks, the most notable of which is loss of control. A person who creates a life estate deed loses the ability to sell, mortgage, lease, or otherwise deal with the property without involving the remainder beneficiaries. Indiana TOD deed forms avoid this drawback by allowing the owner to retain complete control over the property.

Some states—including Florida, Texas, and Michigan—recognize an enhanced form of life estate deed called a lady bird deed. Although lady bird deeds serve some of the same purposes as TOD deeds, there are differences that have important legal consequences. Lady bird deeds are not used in Indiana.

Relationship of transfer-on-death deed form to warranty of title

In many states, TOD deeds cannot include a warranty of title. Indiana law is different. Section 32-17-14-11(f) of the Indiana Transfer on Death Property Act allows an Indiana TOD deed to contain a warranty of title.

TOD deeds with multiple owners or multiple beneficiaries

An Indiana TOD deed can be from multiple owners. It can also be to multiple new owners (beneficiaries). Indiana law has special rules for multiple owner and multiple beneficiaries.

If the TOD deed is from multiple owners, then the consequences of the deed depend on the form of co-ownership:

• If the owners hold title as tenants in common, then each owner may freely dispose of his or her interest. Any owner that makes a TOD deed may pass his or her interest to the beneficiaries named in the TOD deed.
• If the owners hold title as joint tenants with right of survivorship and only one owner signs the TOD deed, then the signing of that deed severs the joint tenancy. The owners no longer have a joint tenancy with right of survivorship. Instead, the owners will hold title as tenants in common under the rule described above.
• If the owners hold title as joint tenants with right of survivorship and all owners sign the TOD deed, then the deed will transfer the property to the beneficiaries on the death of the last joint tenant. A later conveyance by one owner does not affect the beneficiary designation of the other owner or owners.
• If the owners hold title as tenants by the entirety (a special form of ownership available only to married couples), then a deed by only one owner is invalid. Both spouses must sign in order for the TOD deed to be valid.

If multiple beneficiaries are named in the TOD deed, then the consequences depend on what is specified in the deed. Our Deed Generator gives several options for dealing with the consequences of transfers to multiple beneficiaries and what happens if a beneficiary dies before the owner.

Situations where transfer-on-death deeds cannot be used

Because a TOD deed form becomes effective upon death, non-living owners cannot use a TOD deed. If the property is owned by a business, trust, or any other owner other than a living person, the TOD deed cannot be used.

Some states prohibit the use of a power of attorney to create a TOD deed. Section 32-17-14-11(a)(2) of the Indiana Transfer on Death Property Act allows an Indiana TOD deed to be signed by an owner’s “legal representative,” which presumably would include an agent under a power of attorney. But because the deed must be signed and recorded before death, a TOD deed could not be signed by an owner’s legal representative (for example, an executor of the owner’s estate) after the owner’s death.

How to create an Indiana transfer-on-death deed

Indiana TOD deeds are authorized by the Transfer on Death Property Act, which includes specific requirements that a deed must meet to qualify as a TOD deed. These requirements include:

• The TOD deed must include the language required to create the transfer that takes effect at death. Code § 32-17-14-11(f).
• The TOD deed must be signed by the owner or the owner’s legal representative. Code § 32-17-14-11(a).
• The TOD deed must be recorded with the recorder of deeds in the county where the property is located before the owner’s death. Code § 32-17-14-11(a)(2), (b).
• The deed must meet other requirements that apply to other Indiana deed forms, including a valid legal description.

The deeds created by our Deed Generator were attorney-designed with each requirement in mind. Each deed is customized based on the answers provided in the interview and comes with step-by-step instructions for signing and notarizing the deed and completing the transfer with the county recorder’s office.