On July 9, 2021, Governor Pritzker signed a bill amending the Illinois Residential Real Property Transfer on Death Instrument (TODI) Act. A TODI allows someone who owns residential real estate in Illinois to designate a beneficiary to inherit the real estate and avoid probate. Effective January 1, 2022, TODI will no longer be limited to residential real estate: an Illinois owner of a commercial building will also be able to use a TODI to avoid probate at death.
The TODI amendment requires that:
• The beneficiary of a TODI must be a trust that is in existence at the time the TODI is signed
• The TODI does not have to state that any consideration was given to the owner in return for executing the TODI
• The witnesses to the TODI should not be beneficiaries under the TODI
• The TODI must be notarized and witnessed by two credible witnesses and recorded before the owner’s death
• If the spouse renounces the TODI, it is treated the same way as a renunciation of a will
• The spouse is entitled to one-third of the real estate if the owner also left a descendant or one-half if there is no descendant.
• In order to make a renunciation, the spouse must file a written renunciation in the same Recorder’s office as the TODI was recorded within seven months after the owner’s death.
• A beneficiary under a TODI is subject to the same claims of creditors of the owner as someone who would take under a revocable trust
• Similar rules for contesting wills apply to contesting a TODI
• An individual has two years to contest the TODI unless a probate estate has been opened
The amendment to the TODI retains the requirement that a lawyer draft the TODI but eliminates the requirement that he or she be licensed in Illinois. However, an owner of real property can draft his or her own TODI, and that will not void the transfer.
An experienced Illinois estate planning attorney can review your situation, and advise you whether a TODI or revocable living trust is a better option for you to bequeath real estate and how to protect the future of your loved ones.
If you want to protect your loved ones after you are gone, an experienced estate planning lawyer can advise you on the best options for your situation. To talk to a qualified attorney in Chicago or Lombard, contact the Estate & Probate Legal Group at 630-864-5835.
We serve Cook, Dupage, Kane, Lake, and Will counties.