Transfer-on-Death Deeds in Indiana: A Simple Way to Avoid Probate for Real Property

Indiana law allows property owners to pass real estate directly to a beneficiary at death without going through probate. Here is how transfer-on-death deeds work and what you should consider before using one.

For many Indiana property owners, one of the primary goals of estate planning is to ensure that their real estate passes to their loved ones as quickly and efficiently as possible after death. One tool that can help accomplish this is a transfer-on-death deed, sometimes also known as a TOD deed. Indiana’s Transfer on Death Property Act allows property owners to name one or more beneficiaries who will automatically receive ownership of the property upon the owner’s death, bypassing probate.

A transfer-on-death deed functions similarly to a beneficiary designation on a life insurance policy or bank account. The property owner executes and records the deed during their lifetime, but ownership transfers only upon the owner’s death. The named beneficiary has no ownership interest in the property until the owner’s death. During the owner’s lifetime, the owner retains full control of the property and may sell, mortgage, lease, or use it in any way.

To be valid under Indiana law, a transfer-on-death deed must be signed by the property owner and recorded with the county recorder’s office in the county where the property is located while the owner is still alive. If the deed is not recorded before the owner’s death, it is void, and the property will pass through probate with the rest of the owner’s estate. The owner may revoke or change the deed at any time by executing and recording a new deed or a revocation document. The beneficiary’s consent is not required for revocation.

While transfer-on-death deeds are a practical and low-cost estate planning tool, they have limitations that property owners should understand. A TOD deed does not protect the property from the owner’s creditors. If the owner has outstanding debts at the time of death, creditors may still have claims against the property. Indiana’s Medicaid estate recovery program can also reach property transferred under a TOD deed. Additionally, if a named beneficiary predeceases the owner and no alternate beneficiary is designated, the beneficiary’s interest may lapse, potentially sending the property to probate.

A transfer-on-death deed works best when it is part of a coordinated estate plan that accounts for the owner’s other assets, beneficiary designations, and planning goals. The real estate and estate planning attorneys at McNeelyLaw can help you determine whether a TOD deed is right for your situation and ensure it is properly drafted and recorded. Contact us today to discuss your options.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.