How to Pass Your Home On to Your Heirs Affordably

Sen Shimabukuro 80AI am happy to report that the Legislature adopted the Uniform Real Property Transfer on Death Act.1 This Act allows a home owner to designate beneficiaries to inherit their home upon their death without the requirements of probate, or the formalities of wills or trusts. The owner simply designates a beneficiary on his/her deed, and files the “Transfer on Death Deed” (TODD) document at the Bureau of Conveyances or Land Court. Here is a link to the Act:

I have seen very sad situations where a homeowner dies without a TODD, and their heirs lose the home because they cannot afford the thousands of dollars that it costs to hire an attorney to represent them in probate court. And while it is expensive to set up a trust, or divide assets in a will through Probate Court, the TODD is affordable.

Some estate planning attorneys can assist with TODD’s for under $500, and it may even be possible to do it yourself if your home is paid off, you are certain you have clear title, and there are no other complicating factors.

A word of caution, however. Unlike trusts, TODD’s do not protect your home from liens due to your nursing home costs, and do not shield beneficiaries with a high amount of assets from estate taxes, if any.  Trusts, if you can afford them, provide greater protections and flexibility.  Nevertheless, TODD’s may be appropriate for those who are low-income, and whose only asset is their home.  And having a TODD is definitely better than having no estate planning whatsoever.  If at all possible, it is recommended that you contact an attorney for assistance and advice regarding TODDs.

Waianae resident Monique De Ocampo recently completed the TODD process, and is so relieved to have a plan to pass her home to her heirs. She emailed me, “Thanks again for making this transfer on death deed available here in Hawaii!”

If you need further information about the Transfer on Death Deed Act, contact my office for possible assistance, at 586-7793.

1 Sen. Shimabukuro introduced this bill, SB105.

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