3 Possible Drawbacks of a Transfer on Death

Utilizing a transfer on death is a popular technique for estate planning and it involves automatically transferring the ownership of property to someone else when you die. You can do this with bank accounts, real estate, and some other types of assets. Here are some of the potential drawbacks of using this method.

1. Intentions Will Be Known

In some cases, when you utilize this method, your intentions will be known as soon as you set it up. If you are going to pass on a piece of real estate to someone else, you have to record their name on the deed with the county. This information would not be part of the public record.

2. Joint Ownership Concerns

In some cases, you may wish to pass on a piece of property to multiple beneficiaries. For example, if you have a piece of real estate, you might want all three of your kids to have it when you die. When you do this, they will all be equal owners of the property. This can lead to fights and problems between them.

3. Tax Issues

This method does not help you avoid it estate taxes. If you put the property into a living trust, you could potentially avoid the taxes.