Beneficiary Deeds: How They Work
Both Missouri and Illinois give homeowners a statutory tool to transfer title to their real estate upon death while bypassing probate. The documents have slightly different names, “Beneficiary Deed” in Missouri and “Transfer on Death Instrument” (TODI) in Illinois, but they serve the same function. They are conceptually like the “pay-on-death” designation on a bank account or a “transfer-on-death” provision on a vehicle title.
Mechanics
The owner executes and records the deed during his or her lifetime. Title remains fully vested in the owner’s name, and the beneficiary receives no present interest. Upon the owner’s death, ownership shifts automatically to the named beneficiary, subject to any liens, mortgages, or unpaid taxes that existed when the owner died. The beneficiary perfects title by filing an affidavit of death and the original death certificate with the county recorder. No court order is required.
Revocability
A beneficiary deed is entirely revocable. The owner can record a revocation, execute a new deed naming different beneficiaries, or sell the property without the beneficiaries’ consent. Recording the revocation before death is critical; an unrecorded change is ineffective.
Multiple Beneficiaries and Contingencies
Owners may name multiple beneficiaries and designate contingent beneficiaries. For instance, “to my children, Adam and Maria, in equal shares, and if either fails to survive me, to his or her descendants per stirpes.” In this example, Adam and Maria are known as the “Primary Beneficiaries” and the descendants are known as the “Contingent Beneficiaries.”
Duties of the Owner
Because title does not pass until death, the homeowner retains all duties: paying property taxes, mortgage payments, insurance premiums, and HOA assessments. Beneficiaries have no rights, and thus no responsibilities, until the owner’s death.
Coming soon… Part 4: Advantages of Beneficiary Deeds
This article is intended for educational purposes and does not constitute legal advice. For advice specific to your situation, please consult a qualified attorney.
