When someone dies, the most valuable asset they often have is their home. In fact, it's often the only thing that they have of great material worth to pass to their children.
Since it can be burdensome to have to go through probate , which could tie the property up for a year or longer, Nebraska now permits people to pass their real estate on to their heirs through a transfer on death deed instead. If you're interested in learning more about this method of passing on your property to your heirs, here's some important information.
How does a transfer on death deed work?
A transfer on death (TOD) deed works very much like a "payable on death" bank account. It's entirely revocable during your lifetime and conveys no ownership interest in your property to the other person while you're alive. It's a simple form that can be kept with your will or other estate documents. The house automatically passes into your heir's possession at the moment of your death.
What are the benefits of a TOD deed?
This kind of deed provides you with a certain layer of security, unlike what you have if you put your heir's name on your property as a co-owner in order to avoid probate. When you do that, it creates immediate ownership interest in your home for your heir.
You can't remove your heir's name from the property at will. You also run the risk that your heir's creditors will try to go after the property if he or she runs into financial trouble. For that matter, you could run into problems if your heir gets a divorce, since the property might be considered part of your heir's marital assets.
Because transfer on death deeds have only been available in Nebraska since 2013, many people are not even be aware of them. If you're still trying to decide what to do about your own property once you're gone, consider finding out more about this and other estate planning options.