When a person dies, their estate may undergo a legal process called probate in which a decedent’s estate is administered, their assets and property distributed, and their debts settled. Probate is supervised and managed by the Surrogate’s Court. The court determines the validity of the will, appoints an executor to carry out the decedent’s wishes, and provides an opportunity for all interested parties with a pecuniary interest to contest the will. Depending on delays, such as those due to disputes between beneficiaries, will contests, or a packed court schedule, the duration of probate can span anywhere from a few months to more than a year. Until probate concludes, the estate may need to pay carrying costs of maintaining the decedent’s real property. To prevent the estate from losing value, it is prudent to avoid probate wherever possible. Recently, New York State approved a tool to distribute real property while avoiding probate: the transfer on death deed.
The Transfer On Death Deed Law: New York Real Property Law, Chapter 50, Article 12, § 424 (2024)
The state of New York has adopted legislation allowing for transfer on death deeds, pursuant to New York Real Property Law, Chapter 50, Article 12, § 424. Effective as of July 19, 2024, New York joined the plurality of states, as well as the District of Columbia, in legalizing transfer on death deeds (or other deeds with an equivalent purpose). Transfer on death deeds allow individuals to transfer real property to one or more beneficiaries upon their death without subjecting it to a probate proceeding.
Transfer on death deeds can be revoked at any time, and the transferor is free to transfer the property to others during their lifetime.
Understanding Transfer On Death Deed Requirements
There are various requirements for transfer on death deeds, which are outlined in New York Real Property Law, Chapter 50, Article 12, § 424. Similar to a last will and testament, according to § 424, the deed needs to be signed by two witnesses, and similar to other forms of deed, it must be notarized and recorded before the transferor’s death at the county clerk’s office.
The Takeaway
Court fees, carrying costs, and other expenses during probate can reduce an estate’s total value before beneficiaries inherit property and assets. Transfer on death deeds may help conserve an estate’s value and allow beneficiaries to circumvent carrying costs during the probate process. Those looking to transfer real property to their beneficiaries should consider a transfer on death deed as a means of saving their next of kin both time and money.
The foregoing is not intended to be comprehensive nor constitute legal advice. If you would like to discuss your specific circumstances or would like more information, feel free to contact us at (212) 625-8505.