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What are the alternatives to TOD deeds in Pennsylvania?

On Behalf of | Jan 31, 2025 | Estate Administration |

Transferring property after death requires careful planning. In Pennsylvania, a traditional will is the most commonly used method for passing real estate to heirs, as the state does not recognize transfer-on-death (TOD) deeds for real estate. However, alternative estate planning tools can achieve similar results.

Alternatives to a transfer-on-death deed in Pennsylvania

Since Pennsylvania does not allow TOD deeds for real estate, property owners must use other methods to bypass probate. One option is creating a revocable living trust, which allows property to transfer directly to beneficiaries without going through probate. Another approach is holding property in joint tenancy with rights of survivorship, which ensures automatic transfer to the co-owner upon death.

Benefits of using a will in Pennsylvania

A traditional will provides flexibility for estate planning. Property owners can specify how real estate, personal belongings, and financial assets are distributed. Additionally, a will allows for the appointment of an executor to handle estate matters and settle debts.

A will also enables property owners to name guardians for minor children and establish provisions for their care. This makes it a comprehensive tool for estate planning beyond real estate transfer.

Drawbacks of a will in Pennsylvania

Probate is a major drawback of using a will in Pennsylvania, often taking months or even years to complete, with court fees and legal costs diminishing the inheritance. Additionally, Pennsylvania’s inheritance tax applies to property passed through a will, potentially reducing its financial value for beneficiaries, including children and other heirs.

Since Pennsylvania does not recognize TOD deeds for real estate, property owners should explore alternative estate planning tools such as trusts or joint ownership.