As of July 1, 2024, New Hampshire homeowners have a new tool for estate planning—the “Transfer on Death (TOD) deed.” With the enactment of the Uniform Real Property Transfer on Death Act (URPTODA), property owners in New Hampshire can now transfer real estate directly to a named beneficiary upon death, bypassing the often lengthy and costly probate process.
What is a Transfer on Death Deed in New Hampshire?
A “transfer on death deed” is a real estate deed recorded with the county’s Registry of Deeds, that allows a homeowner to name a beneficiary to automatically inherit the real property upon their death. This process helps avoid probate, ensuring a smoother, more efficient transfer of property ownership. New Hampshire is the 20th state to adopt this law, now codified under RSA Chapter 563-D.
One of the most attractive aspects of a TOD deed is that the property owner retains full control of the property during their lifetime. Even though a beneficiary is named, the owner can sell, transfer, or even revoke the TOD deed at any time without the beneficiary’s consent or knowledge. The beneficiary has no ownership rights until the owner’s death.
Key Benefits of a TOD Deed for New Hampshire Homeowners
Using a transfer on death deed in New Hampshire offers several key benefits:
- Avoids Probate: The primary advantage is avoiding the probate process. The transfer happens automatically upon the owner’s death, simplifying the process for the beneficiary.
- Full Control: The owner retains complete control of the property during their lifetime, with the ability to sell or mortgage the property and change beneficiaries as needed.
- Cost-Effective: Compared to setting up a trust, a TOD deed is a straightforward and affordable option for estate planning.
- Privacy: Because the property passes outside of probate, the details of the transfer remain more private than if the property were distributed through a will.
Downsides of Using a Transfer on Death Deed
While a transfer on death deed offers simplicity and affordability, there are some potential downsides compared to other estate planning options, such as using a trust to transfer real estate. One major limitation is that a TOD deed only addresses the transfer of real property. If the owner has multiple assets, such as bank accounts or investments, they may still need additional estate planning tools to ensure all assets are properly managed. In contrast, a trust can handle a broader range of assets under one comprehensive plan.
Additionally, TOD deeds do not provide protection from creditors or estate taxes, whereas a trust can offer more sophisticated asset protection and tax planning strategies. Trusts can also account for complex family dynamics, allowing for more detailed conditions on how and when beneficiaries receive assets, while a TOD deed offers no such flexibility. If privacy is a concern, a trust may also be preferable, as the transfer of assets through a trust generally avoids public record altogether, while a TOD deed is a recorded document that becomes part of the public file.
What Happens with TOD Property After the Owner’s Death?
Once the transferor passes away, the beneficiary automatically inherits the property, but there are important considerations. The property passes subject to any mortgages, liens, encumbrances, or other claims that existed at the time of the owner’s death. Additionally, there’s a period during which creditors can make claims against the estate, which could impact the title.
For beneficiaries, this may require working with an attorney to resolve any outstanding debts or issues before taking full ownership. Additionally, title agents will likely add conditions to title commitments or final policies when dealing with a property transferred through a TOD deed.
Why New Hampshire Homeowners Should Consider a TOD Deed
A transfer on death deed can be a simple, cost-effective way for homeowners in New Hampshire to ensure that their property passes to their loved ones, while avoiding the hassle of probate. The TOD deed also provides flexibility for the homeowner during their lifetime, without the limitations of a life estate deed.
However, while a TOD deed is a great tool, it’s important to consider it within the context of a broader estate plan. Consulting with an experienced estate planning attorney can help ensure that a TOD deed is the right option for your situation and that all legal requirements are met.
If you’re a New Hampshire homeowner interested in exploring how a “transfer on death deed” can benefit your estate plan, reach out to Beaupre Law, PLLC. Our team is here to guide you through the process and help you protect your legacy.