Illinois Transfer on Death Instrument for Real Estate

On January 1, 2012, the Illinois Residential Real Property Transfer on Death Instrument Act (755 ILCS 27) went into effect. With it, owners of residential real property in Illinois have a new choice for non-probate asset allocation—the transfer on death instrument (TODI).

Similar in concept to Ladybird, beneficiary, and enhanced life estate deeds, these documents allow homeowners to name a beneficiary to receive their property following the owner’s death, while preserving absolute possession of and control over the property up to that point; it contains no covenants or warranties of title to protect the beneficiary. Because the Illinois document DOES NOT transfer ownership when it’s executed, the owner may revoke the transfer at will, and is allowed to reallocate, sell, or otherwise dispose of the real estate as desired with no restrictions or obligation.

One important difference between the Illinois TODI and other Ladybird, enhanced life estate, or beneficiary deeds is the fact that it is not legally viewed as an actual deed. The TODI must be submitted for recording before the owner dies to be effective, and the beneficiary must record a separate affidavit within thirty (30) days of the granting owner’s death to finalize the conveyance of ownership interest. (77 ILCS 40)

Consider this useful estate planning tool when reviewing options for Illinois residential real estate.

Available Illinois Transfer on Death Deeds: