Episode 36
Host: Jill Mastroianni
Guest: Jen Gumbel
When Transfer-on-Death Deeds Promise to Avoid Probate but Create Chaos
Thinking about using a Ladybird deed (also known as a transfer-on-death deed) to keep your house out of probate? It may sound like the perfect shortcut but it can create more problems than it solves. In this episode, Jill is joined by Minnesota attorney Jen Gumbel to unpack the good, the bad, and the unintended consequences of these deeds. Together, they explore why they’re tempting, where they go wrong, and how they fit (or don’t fit) into a thoughtful estate plan.
Key Takeaways
Deeds: A deed proves ownership of real estate and transfers property. A transfer-on-death deed avoids probate, but only if completed and recorded correctly.
DIY Pitfalls: Errors in legal descriptions, notarizations, or required signatures (like spousal consent) can invalidate the transfer-on-death deed.
Beneficiary Risks: If a named beneficiary dies before you, the outcome depends on state law. Without careful planning, the property may end up in probate anyway.
Joint Ownership Complications: Naming multiple beneficiaries as joint tenants can create unintended consequences, like one child inheriting everything by survivorship.
Trusts vs. Deeds: Trusts provide rules and flexibility that deeds can’t. Using a trust as the beneficiary of a transfer-on-death deed can combine probate avoidance with better safeguards.
Medicaid Liens: In states like Minnesota, transfer-on-death deeds do not protect against Medicaid liens.
Insurance Gaps: When property passes automatically, insurance coverage may lapse unexpectedly. Families can be left unprotected if a death and disaster occur close together.
Revocation and Public Records: Transfer-on-death deeds can be revoked, but all deeds are public record, meaning family members may later see the changes, creating confusion or conflict.
Strategy Over Shortcuts: Deeds are tools, not strategies. Without an overall estate plan, using transfer-on-death deeds alone can leave loved ones with costly, stressful problems.
Resources and Links:
Medicaid Podcast Episode: What You Need to Know About Medicaid and Protecting Your Mom’s House
Connect with Jen:
At Wagner Oehler, Ltd: Jen Gumbel
Connect with Jill:
Website: DeathReadiness.com
Email: jill@deathreadiness.com
Learn more about Jill’s services
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