Georgia’s new “transfer on death” deed (TOD) is a property transfer mechanism that became available effective July 1, 2024. A TOD allows the owner of real property to execute a deed which designates a beneficiary to receive the real property upon the death of the owner, the goal being to avoid probate upon the owner’s death.

The important thing to note is that the transfer is not actually completed until the beneficiary accepts the interest in the property by executing an affidavit which is recorded with the Superior Court in the county where the property is located. This affidavit has strict requirements and a copy of the record owner’s death certificate must be attached to the affidavit. The affidavit must be recorded within 9 months of the record owner’s death or the interest in the property will revert to the owner’s estate, thereby requiring probate.

The intended benefit of these deeds is that they are quick and easy to administer and relatively inexpensive. However, there are several drawbacks. Below are some concerns and reasons why we, and it appears others in the estate and real estate legal circles generally, are not recommending clients use TODs in an effort to transfer property upon their deaths at this time.

1. What if the beneficiaries don’t agree? Imagine a situation where there are multi-ple beneficiaries who inherit via TOD but can’t agree on what to do with the property or decide on a sales price, etc. In a well drafted will or trust, a personal representative or trustee has the authority to settle these kind of disputes. Who has the authority when there is a TOD?

2. How do you change a TOD? Revocation of TODs also require strict procedures. Failure to strictly follow the revocation rules will result in the revocation being inef-fective and could result in property being transferred to unintended beneficiaries.

3. How will title companies view TOD deeds? When drafting the beneficiary’s affidavit to accept the property, it’s unclear what legal description of the real estate must be attached – is it the original description from the TOD or the description of the property owned by the grantor at the time the affidavit is filed? If the acceptance is not valid, the transfer is ineffective and probate will be necessary.

4. What are the potential tax consequences? It is unclear if a beneficiary in a TOD will be able to take advantage of the stepped-up basis in the real estate that would be available to them in inheritance as a beneficiary in a will or trust. This could result in higher capital gains taxes when the property is sold.

5. What are some other concerns? The TOD statutes provide a form that can be filled out and completed by anyone. TODs can therefore be easily prepared at home without the assistance of an attorney which leaves the grantor susceptible to undue influence in the drafting and execution process. Other states that allow TODs have seen litigation surrounding the execution of these deeds.