Transfer on Death Deed - Individual to Three Individuals - Does NOT include Alternate Beneficiaries. - Washington 2025

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Disadvantages of transfer on death deeds Creditors may come after the new owner(s) of the property. Beneficiaries may get equal shares of the asset. Not available in many states. Unintentional disinheritance. Raises the risk that estate planning documents dont match.
General information. A Transfer on Death Deed (TODD) allows a property owner sign a legal document that will transfer property located in Washington State to another person as an inheritance after the property owner dies.
A TOD account can have multiple beneficiaries, as long as the account owner establishes how the assets will be divided, said Damaryan. But even if the account has equal distribution of assets, you could still have conflicts over who is in charge of the money because there is no one designated to handle it.
You want to be sure to use the beneficiarys legal name rather than categories or relationships, such as my children. For example, if you are naming your two daughters as your beneficiaries, you should use Jane Doe and Julie Smith instead of my daughters. If you name more than one beneficiary, you should indicate
TODs allow for full control during the account holders lifetime, avoid probate, provide privacy, and are cost-effective. While TODs are a simple and efficient estate-planning tool, they are not the best option for complex financial setups and do not protect against creditors.
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However, TOD does not avoid taxes. The owners death exposes transfer-on-death accounts to capital gains tax, estate tax, and inheritance taxes.
Beneficiary Liability: A beneficiary named in a TOD deed becomes personally liable for the property owners unsecured debts up to the value of the property received. This result may have been unintended by the owner and as an unpleasant surprise to the beneficiary.
The potential downside is the beneficiaries and estate executor might not be aware of all the TODs. The accounts could become lost property after the owner passes away if the beneficiaries dont claim them. To avoid that, an owner should keep a record of all TOD accounts.

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