Thinking about how to keep your home out of probate and into your family’s hands without headaches? At Woods & Bates, P.C., we focus on estate planning, trust work, and real estate, and we strive to make this process clear and manageable. A Transfer on Death Instrument, or TODI, is one tool that often helps Illinois homeowners pass property smoothly to loved ones. In this guide, we explain what a TODI is, how it works, its benefits and limitations, and the steps to create one correctly.
TODI: The Basics
A Transfer on Death Instrument is a legal document that allows Illinois real property to pass directly to a named beneficiary upon the owner’s death, thereby skipping probate. It functions similarly to naming a payable-on-death beneficiary on a bank account, except that the subject in this case is real estate. Illinois made TODIs available on January 1, 2012, under the Illinois Residential Real Property Transfer on Death Instrument Act, cited at 755 ILCS 27/1 et seq.
Many families use a TODI to keep a house or condo in the family without court delays. The details below illustrate how the process unfolds in real life.
How a TODI Works: A Step-by-Step Overview
Here is the basic lifecycle of a TODI, from signing through the transfer to your beneficiary.
Execution of a TODI
The property owner, referred to as the transferor, completes a written Transfer on Death Instrument, naming one or more beneficiaries. Illinois law requires that the TODI be signed by the owner, witnessed by two credible witnesses, and notarized. The form must also contain a correct legal description of the property to be valid.
Before you sign, it’s helpful to gather a short list of information to ensure the document is accurate and complete.
- Exact legal description and Property Index Number, often found on the deed or tax bill.
- Full names and addresses of primary and backup beneficiaries.
- How you want multiple beneficiaries to share titles, such as equal shares.
Once your TODI is properly executed, the next step is to have it recorded with the relevant office.
Recording the TODI
The TODI must be recorded with the Recorder of Deeds in the county where the property is located, and it must be recorded before the owner’s death. If the TODI is never recorded, it has no legal effect. Timing is crucial here, so don’t delay this step.
Life changes, and plans do too, which is why Illinois gives you the option to adjust or cancel a TODI.
Revocation or Changes
A TODI can be revoked or changed at any time before death. The safest way is to sign and record a new TODI or record a separate revocation document. A will cannot revoke a TODI; therefore, any change must be handled through a new TODI or a recorded revocation.
With the paperwork set, the transfer itself occurs at death without court involvement.
Transfer Upon Death
At the owner’s death, the named beneficiary becomes the legal owner. To update the land records, the beneficiary should record an Affidavit of Death and complete any required tax filings so the title shows the new owner. This step helps future buyers and lenders see a clean title.
That is the basic path. Next, let’s examine why many owners choose a TODI for their home.
Advantages of Using a TODI in Illinois
A TODI offers a simple way to pass real estate with less cost and fewer delays for your family.
Avoiding Probate
Real estate that passes by TODI does not go through probate. This often saves months of waiting and a fair amount of legal expense for your heirs.
You also maintain control while you are living, which can be a significant advantage.
Maintaining Control During Life
Unlike a gift or specific irrevocable arrangements, a TODI leaves you in full control while you are alive. You can sell, refinance, or change beneficiaries at any time. The beneficiary gains no rights until after you pass away.
That control pairs nicely with a more straightforward process for your family later on.
Simplifying Estate Administration
The property passes to the beneficiary upon death, so no court case is required to transfer title. Your heirs face less paperwork and spend less to wrap up your affairs.
If your plans or family needs to shift, a TODI can adapt without heavy lifting.
Flexibility and Revocability
You can revoke the TODI or update beneficiaries while you are living. Life happens, plans evolve, and a TODI can keep pace.
Many owners also appreciate that creating a TODI does not trigger taxes immediately.
No Immediate Tax Implications
Signing a TODI does not constitute a lifetime transfer for gift tax purposes. Your property tax status also remains with you while you are living, as you continue to be the owner.
Privacy matters to many families, and a TODI can also help in this regard.
Maintaining Privacy
Probate records are public. A TODI keeps the transfer out of that public file, which helps keep family affairs more private.
Even with these benefits, a TODI is not perfect for every property or every family.
Limitations and Important Considerations
TODIs come with clear rules and boundaries; it is wise to weigh them before signing.
Residential Real Estate Only
Illinois law limits TODIs to residential real estate. That means commercial property and some other classes are not eligible. Qualifying homes include one- to four-unit buildings and condominium units; however, buildings with five or more units do not qualify for this program.
Keep in mind that a TODI does not wipe out mortgages or other recorded interests.
Subject to Debts and Liens
If there is a mortgage, tax lien, or other secured debt, the beneficiary receives the property subject to those obligations. Creditors can still reach the property to satisfy valid claims. The new owner will need a plan to pay off or refinance the loan.
Family dynamics play a significant role when real estate ownership is shared among multiple individuals.
Not Always Ideal for Complex Family Situations
If you want multiple heirs to share a single property, a trust can offer better rules for use, expenses, and exit plans. A simple TODI can leave co-owners without clear ground rules, which invites conflict.
Lastly, the formalities are not optional, and missing one can render the TODI ineffective.
Proper Execution and Recording Required
The TODI must be signed, witnessed by two credible witnesses, notarized, and recorded in accordance with applicable laws and regulations. If any step is skipped, the TODI is invalid, and the property may be subject to probate. Double-check names, legal descriptions, and signatures before recording.
In short, TODIs work well for many Illinois homeowners, but not for every situation. If things are complicated, we can discuss options such as trusts, joint ownership, or other tools that may be a better fit for your situation.
Creating a TODI in Illinois: A Guide
Getting help from a lawyer reduces errors and keeps your TODI aligned with your broader plan.
Assessment with a Knowledgeable Attorney
Statutory forms exist, but working with a deed lawyer helps avoid drafting traps and conflicts with other documents. We also check how the TODI interacts with your will, trust, or powers of attorney.
Once the strategy is set, we move to drafting the actual instrument.
Preparation of the TODI
Your TODI should name primary and backup beneficiaries, state how multiple beneficiaries hold title, and include the correct legal description. We also review the title for any issues that could slow the transfer later.
After the text is ready, proper signing rules apply.
Signing, Witnessing, and Notarization
The property owner must sign in front of two witnesses and a notary public. Witnesses should be disinterested adults who can later testify if needed. We keep clean originals and scan a clear copy.
With signatures complete, it is time to make it a public record.
Recording with the County Recorder
Record the TODI with the Recorder of Deeds in the county where the property is located, and do it while the owner is alive. Recording fees vary by county. Keep your stamped copy once it comes back.
Good recordkeeping helps your beneficiary act fast when the time comes.
Keeping a Copy and Informing Beneficiaries
Store the recorded TODI with your other estate papers and inform your beneficiary where it is located. Share a short checklist for what to file at death, including the Affidavit of Death.
A quick recap helps keep everything on track.
- Confirm names, legal description, and PIN match the deed.
- Use two credible witnesses plus a notary at signing.
- Record promptly and save stamped copies with your plan.
Now, let us compare a TODI with a will, since many people use both tools.
TODI vs. Will: What’s the Difference?
Both tools are helpful, but they work in different lanes. A TODI targets real estate and avoids probate for that property. A will covers the rest of your assets and generally requires probate to have legal force.
When a will and a TODI conflict over the same parcel, the TODI takes precedence over the will. Your will still governs other assets and can backstop anything not covered by a TODI or beneficiary form.
| Topic | TODI | Will |
| What it transfers | Real estate named in the TODI | All probate assets not passing by deed or beneficiary form |
| Probate needed | No, for that property | Yes, to be effective |
| Control while alive | The owner keeps full control | The owner keeps full control |
| Change or revoke | Yes, by new TODI or recorded revocation | Yes, by new will or codicil |
| Privacy | Private transfer outside the court | Filed in court, public record |
| Conflicts | TODI controls the named property | Does not override a recorded TODI |
Many Illinois families use both, often incorporating a living trust to achieve other goals, such as asset management, incapacity planning, or long-term control for young beneficiaries.
Contact Us for Your Estate Planning Needs
Woods & Bates, P.C. is committed to high-quality representation in estate and trust administration, estate planning, and real estate matters. We help Illinois families use tools like TODIs the right way and fit them into a complete plan. If you want help setting up a TODI or reviewing your plan, we would be glad to talk.
Feel free to call us at 217.735.1234 or reach us through our Contact Us page. We welcome your questions and offer both virtual and in-person meetings to accommodate your schedule. Our team is dedicated to achieving outcomes that protect your home, alleviate stress, and reflect your unique wishes.