Real Estate Fundamentals – Amendments to Illinois Real Property Transfer on Death Instrument Act

In July 9th, 2021, Governor J.B. Pritzker signed a bill which changes the Residential Real Property Transfer on Death Instrument Act, the new law will be called the Illinois Real Property Transfer on Death Instrument Act, this law will start on January 1st, 2022. The previous law and the new law that allows for a person/owner to create a transfer on death instrument (“TODI”) which allows a person/owner to identify real property that they own place it inside a TODI and upon that person/owner’s death the real property identified in the TODI will automatically pass to the designated beneficiary that the person named in the TODI. This process avoids the Illinois Probate Courts. The new law adds to this by allowing commercial real estate to be identified by a TODI where a person names a designated beneficiary and upon that person/owner’s death, the commercial real estate will automatically transfer to the named designated beneficiary upon the person/owner’s death, thereby avoiding Probate Court. The new law also allows that a designated beneficiary of a TODI pertaining to any real property commercial or residential can also be a trust, as long as the trust is in existence at the time the TODI was executed, is created by the TODI, created by the will of the owner, or is created by another person who has predeceased the owner.