In July 2024, New York State began accepting Transfer-on-Death Deeds as a way for real property to pass outside probate (i.e. automatically upon the death of an individual). These types of deeds can be a useful tool to avoid probate, however, they have significant limitations that should be understood before proceeding.

Primarily, unlike other types of deed transfers used with estate planning techniques, these deeds offer the grantor no Medicaid protection. In other words, the deed remains an asset of the grantor until their passing, and thus, is subject to long-term care Medicaid asset limits and could need to be sold to pay for the grantor’s long-term care.

Additionally, while the deed is recorded with the County Clerk’s office, there is no direct notification to a beneficiary of their inclusion on a transfer-on-death deed. This means that unless you tell the beneficiary that they have been named, they may never know. This opens up the possibility that the property will sit vacant, could go into foreclosure, or be subject to deed fraud, among other things. As a way to prevent fraud and finalize the transfer, the County Clerk requires the beneficiary to file a death certificate of the grantor along with other forms. But, again, unless your beneficiary knows to do so, the property could be caught in limbo and essentially unclaimed.

There can be times when a transfer-on-death deed is appropriate, but if you are considering this method, please contact an attorney to ensure it effectuates your wishes and is the best fit for your situation.