A transfer on death instrument (TODI) is one of the probate-avoidance tools covered in Illinois estate planning. It moves a specific parcel of real estate to a named beneficiary at the owner’s death, without a will and without probate, as long as it meets the signing and recording rules Illinois reworked in 2022. This article explains what the instrument is, how it must be executed and recorded, what it does and does not do while the owner is alive, and how the property passes when the owner dies.
Transfer on death deed vs. transfer on death instrument
People searching for an Illinois “transfer on death deed” are usually looking for what the statute calls a transfer on death instrument. Illinois created the tool in the Transfer on Death Instrument Act, 755 ILCS 27. The instrument names a “designated beneficiary” who receives the owner’s real estate when the owner dies. Under 755 ILCS 27/5, “real property” means an interest in realty located in Illinois that can be transferred at the owner’s death, and an “owner” is an individual, not a trustee or someone holding title in a fiduciary or agency capacity.
The Act originally reached only residential real estate. A 2022 amendment, Public Act 102-68, effective January 1, 2022, broadened it to real property generally and rewrote how the instrument is signed and witnessed. That amendment is the source of the current execution rules in 755 ILCS 27/45.
A TODI is different from putting a co-owner on the title. It does not create a present interest for the beneficiary and does not require the owner to give up any control during life. It also differs from a small estate affidavit, which handles limited personal property and does not transfer real estate.
Creating and recording a valid TODI
755 ILCS 27/40 sets three requirements. The instrument must contain the essential elements and formalities of a recordable inter vivos deed and be executed in compliance with the witnessing section; it must state that the transfer to the beneficiary occurs at the owner’s death; and it must be recorded before the owner’s death in the county where the real estate is located. An instrument that misses any of these is void and does not transfer title.
The execution rules sit in 755 ILCS 27/45. The instrument must be signed by the owner (or by another person in the owner’s presence and at the owner’s direction) and attested in writing by two or more credible witnesses, and the signatures must be acknowledged before a notary public. If a beneficiary or a beneficiary’s spouse serves as one of the witnesses, that beneficiary’s gift can be void unless enough disinterested witnesses also signed, so the witnesses are usually people with no stake in the property.
Prepare it as a recordable deed
Draft the instrument with the legal description of the property and the same formalities Illinois requires for an ordinary recordable deed. Under 755 ILCS 27/40, it does not need to state consideration or the beneficiaries’ addresses, but it must identify the real estate clearly enough to record.
Name the beneficiary and state the timing
Identify each designated beneficiary and state that the transfer happens at the owner’s death. This language is what separates a TODI from a present conveyance.
Sign before two witnesses and a notary
The owner signs, two or more credible witnesses attest in writing, and a notary acknowledges the signatures, as required by 755 ILCS 27/45. Missing the two-witness requirement makes the instrument void.
Record it with the county recorder before death
File the signed instrument with the recorder in the county where the property sits. Recording during the owner’s lifetime is a condition of validity under 755 ILCS 27/40.
What the TODI does while the owner is alive
A recorded TODI changes almost nothing during the owner’s life. Under 755 ILCS 27/60, the instrument does not affect the owner’s right to sell, transfer, or mortgage the property; it does not create any legal or equitable interest in the beneficiary; and it does not subject the property to the beneficiary’s creditors. It also does not affect the owner’s or the beneficiary’s eligibility for public assistance, so recording a TODI is not itself a transfer for benefit-eligibility purposes.
Because the beneficiary holds no interest yet, the owner can revoke or change the instrument at any time before death, typically by recording a revocation or a new TODI. If the owner signs a contract to sell the property and the sale is still pending at death, 755 ILCS 27/60 provides that the property passes to the beneficiary subject to that contract rather than revoking the instrument automatically. When two or more joint owners are involved, 755 ILCS 27/70 provides that a TODI does not sever a joint tenancy and is controlled by whichever joint owner is the last to die.
What happens to the property at the owner’s death
At the owner’s death, 755 ILCS 27/65 governs how the interest passes. The beneficiary takes the property according to the instrument, subject to the right to disclaim it. The beneficiary takes it subject to every mortgage, lien, and other encumbrance in place at the owner’s death, and the transfer carries no warranty of title. A mortgage on the home does not disappear; it follows the property to the beneficiary.
The section also handles common contingencies. If the owner named two or more beneficiaries to hold concurrent interests, they take equal, undivided shares with no right of survivorship. If a sole beneficiary dies before the owner and is not the owner’s descendant, the property passes to the owner’s estate. If a beneficiary who dies before the owner is the owner’s descendant, that beneficiary’s own descendants take the share per stirpes.
After the owner dies, a beneficiary may record a notice of death affidavit with the county recorder to confirm title, under 755 ILCS 27/75. The affidavit lists the beneficiaries, the legal description, the recording information for the TODI, and the owner’s date and place of death. Filing it is not a condition of the transfer; title passes at death whether or not the affidavit is recorded.
Creditors, claims, and the estate
Avoiding probate is not the same as escaping the deceased owner’s debts. Under 755 ILCS 27/85, a beneficiary who takes under a TODI is subject to creditor, administrative, funeral and burial, and statutory claims to the same extent, and in the same manner, as a beneficiary of a trust that was revocable when the settlor died. That standard comes from Section 505 of the Illinois Trust Code, which makes property of a trust revocable at death reachable for the settlor’s claims and estate costs when the probate estate is not enough to pay them.
In practice, the real estate can still be pursued by the owner’s creditors after death if the probate estate is short, and when a single TODI transfers more than one property, 755 ILCS 27/85 apportions that liability among the properties by their net values. The TODI simplifies transfer of title; it does not wall the property off from valid claims against the estate.
What a transfer on death instrument does not do
A TODI is a narrow tool, and several limits catch owners by surprise:
- It does not reduce or avoid Illinois estate tax, which the Illinois Attorney General administers. The value of the real estate remains part of the taxable estate. For current thresholds and rates, see Illinois estate tax.
- It reaches only Illinois real property. Real estate in another state needs that state’s own transfer tool.
- It cannot be used for property already held in a trust or by an entity, because 755 ILCS 27/5 defines “owner” as an individual and excludes trustees and fiduciaries.
- It does not sever a joint tenancy or tenancy by the entirety, so a survivorship co-owner takes first and the instrument controls only if that owner is the last to die.
- It transfers title without warranty, and the beneficiary inherits any liens or mortgages on the property.
For estates that do not include real estate, Illinois also offers a small estate affidavit, one of the standardized court forms approved for use statewide. That affidavit does not transfer real property, which is why real estate is handled through a TODI, a trust, or probate.
Frequently asked questions
Is a transfer on death deed the same as a transfer on death instrument in Illinois?
Yes. “Transfer on death deed” is the common name; the Illinois statute calls it a transfer on death instrument, governed by 755 ILCS 27. Both terms describe the same recorded document that names who receives a parcel of real estate at the owner’s death.
Does an Illinois TODI have to be witnessed and notarized?
Yes. Under 755 ILCS 27/45, the owner must sign, two or more credible witnesses must attest in writing, and the signatures must be acknowledged before a notary public. An instrument that is not witnessed by at least two credible witnesses is void.
Can a transfer on death instrument be revoked or changed?
Yes, at any time during the owner’s life. Because 755 ILCS 27/60 gives the beneficiary no interest while the owner is alive, the owner keeps full power to sell the property, record a revocation, or record a new TODI naming a different beneficiary.
What happens if the beneficiary dies before the owner?
It depends on who the beneficiary was. Under 755 ILCS 27/65, if a sole beneficiary who is not the owner’s descendant dies first, the property passes to the owner’s estate. If the predeceasing beneficiary was the owner’s descendant, that beneficiary’s own descendants take the share per stirpes.
Does a TODI protect the property from the owner’s creditors or estate tax?
No. Under 755 ILCS 27/85, the beneficiary takes subject to creditor, funeral, administrative, and statutory claims to the same extent as a revocable-trust beneficiary, and the property’s value still counts toward Illinois estate tax.