How to use a Transfer on Death Instrument to avoid probate of real estate

Normally, real estate is transferred through probate upon the death of the owner, unless another arrangement is made. One way to avoid probate for Illinois residential real estate is through the transfer on death instrument, or TODI.  This is executed by the Owner in favor of one or more beneficiaries. The TODI must be recorded with the Recorder of Deeds after execution, but the transfer does not take effect until the Owner’s death.

Requirements for Validity

The TODI must comply with the requirements for the execution of a deed (age 18 or older, of sound mind, signed in front of two witnesses and a notary public); must state that the transfer occurs on the Owner’s death; and must be recorded in the county where the real estate is located prior to the Owner’s death.


Revocation can occur through a subsequent TODI that revokes the prior beneficiary designation, or a revocation instrument. Both must be executed with the same formalities as a TODI and must be recorded prior to the Owner’s death to be effective. All owners must revoke for revocation to be effective. In the event multiple TODIs have been recorded, the most recent controls.

Owner’s Interest in the Real Estate

During the Owner’s life, the beneficiary has no legal rights or interest in the property. The Owner may sell, mortgage, lease, or deed the property during her lifetime without the consent, knowledge, or involvement of the beneficiary. If the real estate is sold or transferred, the bequest will fail.

Upon the transfer, the beneficiary takes title subject to all liens, encumbrances, mortgages, assignments, contracts, and options to which the property is subject at the Owner’s death.

Death of Owner

When the Owner dies, the TODI designated beneficiary must record a Notice of Death Affidavit and Acceptance with the Recorder of Deeds in the county where the real estate is located. Once recorded, the transfer is effective as of the date of the Owner’s death. If not recorded within two years of the Owner’s death, the TODI will be void and ineffective.

The real estate passes to the beneficiary without convent or warranty of title, even if the TODI contains provisions to the contrary.  The beneficiary receives a step-up in the basis of the real estate to the value at the date of death of the Owner.

Uses and Limitations of a TODI

TODIs can be a cost-effective method to transfer real estate outside of probate, particularly for persons who have limited holdings and who do not need to support dependents or other needs better handled through a trust. They are revocable and do not prevent the Owner from selling the property during his life. TODIs do not provide substantial asset protection features, however, nor do they address any other aspects of the estate.