New York recently enacted legislation to allow transfer-on-death (TOD) deeds for New York property, becoming the 30th state (including Washington, D.C.) to pass a TOD law. Effective on July 19, 2024, and codified as a new Section 424 of the N.Y. Real Property Law (the NY TOD Deed Law), the NY TOD Deed Law permits an individual who owns New York real estate to designate beneficiaries to inherit the real estate upon the transferor’s death, while retaining full control during his or her lifetime. With a majority of states allowing a TOD deed, the Pennsylvania and New Jersey legislatures should consider passing a similar type of statute to benefit those owning real estate in their states.
New York Transfer-on-Death Deed Law
The NY TOD Deed Law permits the current owner of New York property to record a deed to memorialize the owner’s wishes that, effective upon the owner’s death, the property would transfer to one or more beneficiaries. Certain formalities must be followed under the NY TOD Deed Law. First, a TOD deed must be executed with the same formalities and contain similar essential elements as other inter vivos deeds. One difference, however, is that the TOD deed should state that the transfer to the designated beneficiaries is to occur at the transferor-owner’s death. Notice or delivery to, and acceptance of the TOD deed by, the designated beneficiaries is not required, nor do these beneficiaries need to furnish any consideration. The transferor-owner may also revoke a TOD deed by acknowledging and recording: a subsequent TOD deed, or another type of deed, that expressly revokes or revokes by inconsistency; or a written revocation. For tenants in common or joint tenants, a revocation by one of the owners will not affect the TOD deeds of the others, and, for joint tenants, a revocation of the TOD deed will only be effective if executed by all of the joint tenants.