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Before 2008, there was no way in Oklahoma for real property or mineral rights to skip probate except for a revocable trust. In 2008, the Oklahoma legislature passed 58 O.S. Section 1251-1258. This statute codified Oklahoma’s Transfer on Death Deed (“TODD”), otherwise known as a “beneficiary deed.” This allows the owners of real property, including surface owner or mineral rights, to deed the property to beneficiary(ies), which skips the need for probate to transfer legal title. These have been a very effective and cost-efficient way for real property to skip the probate process and the title to real property to be easily transferred after the passing of the owners.
However, Transfer on Death Deeds are not a good instrument to use in a variety of situations, and usually a revocable trust is recommended to skip probate in these situations. These are generally situations where a Transfer on Death Deed are not advisable:
- Complex distributions: Transfer on Death Deeds are very good for very simple distributions, like you want to transfer your home to your children, split equal. When you want distributions to be gradual, over time, with strings attached, creditor protected, or any other complication to a distribution, then a TODD is not a good idea.
- Per Stirpes distribution: When you want your children to inherit, but if one of them passes away, you want their children to receive their share of the real estate. Essentially, if you want your grandchildren to inherit if their parent does not survive you, then a Transfer on Death Deeds are not good for this type of distribution.
- Unequal distributions: When you want beneficiaries to receive unequal shares of the home. TODDs are great for equal distributions, but nothing more complex than that.
- Minors as beneficiaries: Minors cannot own real estate in Oklahoma, so you cannot leave a piece of property to a minor through a TODD. It would need to be held in trust for the minor until he/she reaches the age of 18.
If you have a piece of land or mineral rights that you want to leave to one or more people, split equal with no strings attached, then a Transfer on Death Deed is a great option.
There is a catch to Transfer on Death Deeds that must be said: First, the Transfer on Death Deed MUST be filed before the passing of the Grantor, or owner of the real estate. If the deed is filed after, it is not effective. Second, after the passing of the owner of the deed, the beneficiar(ies) must file a Transfer on Death Deed affidavit within nine (9) months of the passing of the Grantor. If this affidavit is not recorded within this time frame, the deed is voided and it would pass via the probate process. This is an easy thing to accomplish, but it is a time-sensitive action that is widely overlooked.
If you are interested in getting a Transfer on Death Deed done in Oklahoma, please call or contact the Skillern Law Firm today! They are inexpensive and easy to accomplish with the help of an attorney.
Most, if not all, timeshare owners will have to decide, at some point in their life, who they want to receive their timeshares after they pass away. Most timeshares are real property interests, that are deeded into the owner(s)’s name(s). If a timeshare is held in an individual’s name at death, just like any other piece of real property, it will have to go though probate. Most people, and some estate planning attorneys, do not realize that timeshares are a real property, and forget to put it into their Revocable Trust. The majority of real estate owners want their children to avoid the cost and delays of Probate proceedings after they die, and to avoid this, a Revocable Trust is one of the easiest and cost-effective ways.
Having a Will does not avoid probate, and especially does not avoid probate when it comes to real estate interests like timeshares. Many people think putting two names on a deed avoids probate. That is not entirely true. It is better to say it delays probate. If two owners, such as husband and wife, own the timeshare as “Joint Tenants” or as “Tenants by the Entirety,” probate is avoided when one owner dies because the co-owner has automatic “rights of survivorship” and becomes the sole owner. This can defer probate, but not avoid it; when the surviving co-owner or sole owner dies, probate will follow.
Some timeshare owners try to avoid probate for the timeshare or other real estate property by conveying the property into one of their children’s names while the owner is still alive. This can cause major headaches down the road though. First of all, there are gift-taxes associated with doing this. Also, if the child goes bankrupt, gets a divorce, or is sued, the timeshare or other real estate interest is included in their estate for these proceedings.
Not only does the timeshare or other real estate interest get included in those proceedings, but the original owner has lost full control of the timeshare. If the owner and their children disagree, they cannot act alone as they once were able to. The timeshare owner will need their child(ren)’s approval for all actions in relation to that timeshare. They could no longer sell, convey, change, or do anything without the child’s signature.
Our attorney encourages her client’s to use a Revocable Living Trust for estate planning purposes, probate avoidance and/or tax benefits. The problems of adding adult children on title to the timeshare are avoided with a trust. To read more about the benefits of a Trust, please read our previous post Living, Revocable, and Irrevocable. Let’s talk trusts.
If you have already created a trust, you need to make sure that you transfer your timeshare and other real property into the trust by way of properly prepared and recorded conveyance documents. Please feel free to call our office today and set an appointment to make sure your trust is funded correctly. If you do not have a trust but are interested in finding out if you need one, call our office today for a free consultation!