Transfer on Death Deeds - An Imperfect Tool

On April 20, 2024, New York State introduced a new way for property owners to transfer real estate after they pass away and without need for probate or administration. This new option, known as a Transfer on Death (TOD) deed, allows owners to designate those who will automatically inherit property such as a house, condo or vacant land upon the owner’s passing. Those with a bank account containing a transfer on death designation may be familiar with the idea.  Owners will retain full control of their property while they are alive, including the right to sell, mortgage, change beneficiaries, or even revoke the deed.  This may allow greater control than a deed merely reserving a life estate.  However, this new option has serious limitations and may not be suitable for everyone's situation. 

DID YOU KNOW?

There is a new law effective in 2024 which now requires the reporting of corporate ownership for corporations opened at any time - past or future - and another new law effective in 2024 which abolishes the $500 credit at real estate closings and now mandates the provision of a Property Condition Disclosure Statement.

Do you know how these new laws may affect you, and open you to potential liability? 

As of June 13, 2021, there is a new statutory short form power of attorney in effect with new execution requirements and obligations.  Nonetheless, an existing previously executed power of attorney, if valid when executed, will continue to be considered valid and does not need to be re-executed.  Execution requirements of a power of attorney are complicated and extremely specific, which is why they are best executed under supervision of counsel.

Whether one is an agent presenting a power of attorney, or the recipient of a power of attorney being presented for use, it is important to be aware that it is unlawful to dishonor or reject a properly executed power of attorney without reasonable cause, and that there is a 10 day deadline for action after presentation of a statutory short form power of attorney.  The statute sets forth various reasons for reasonable rejection of a power of attorney, including but not limited to missing signature, invalid notarization, unacceptable identification, and knowledge or belief of the principal’s death or, in the case of a nondurable power of attorney, incapacitation.  The statute also sets forth specific reasons for rejection which are deemed unreasonable basis for dishonoring a valid power of attorney, including that the power of attorney is not on a form prescribed by that third party to whom it is presented.  Care must be taken as unreasonable or wrongful rejection of a valid power of attorney may result in the imposition of monetary damages, including attorneys’ fees.