In Virginia, an owner of real property can transfer their ownership interest to one or more beneficiaries, effective upon their death, through a Transfer on Death Deed (“TOD Deed”). TOD Deeds automatically transfer ownership of the subject property directly to the designated beneficiaries upon the owner’s death.
Property transfers pursuant to TOD Deeds avoid probate entirely, allowing ownership of the property to pass to the designated beneficiaries without the time and cost obligations of estate administration. This simplifies the transfer of property following the death of the owner, making the process quicker and often less costly than probate.
Although TOD Deeds do not take effect until the property owner’s death, they must be executed and recorded in the circuit court clerk’s office of the county in which the property is located during the owner’s lifetime. Recording the TOD Deed prior to the property owner’s death is essential to its validity; however, it is not a requirement that the beneficiaries be notified of the deed.
Once properly executed and recorded, the property owner’s interest in or rights to the property remains unaffected during their lifetime. Property owners are still free to sell or encumber the property, for example, as beneficiaries have no legal interest in the property during the owner’s lifetime. However, property owners should be mindful that the property will pass to the designated beneficiaries subject to any conveyances, mortgages, liens, encumbrances, or other interests in the property at the owner’s death.
Another key feature of TOD Deeds is that they are freely revocable by the property owner at any time prior to their death. If circumstances later change, property owners can easily revoke all or part of a previously recorded TOD Deed. While Virginia law only recognizes a few specific forms of revocation, something as simple as executing and recording a new TOD Deed with a different beneficiary or express revocation language would suffice.
In short, Virginia’s TOD Deed makes the transfer of real property upon one’s death easy and generally less costly than other methods available, as the property passes outside of probate. TOD Deeds do not affect the property owner’s interest or rights while they are alive, and such deeds are freely revocable by the property owner at any time prior to their death. Accordingly, for many real property owners in Virginia, a TOD Deed may be an advantageous way to leave property to one or more beneficiaries upon their death.