Who Pays The Property Taxes And Insurance On An Illinois Home Between The Owner’s Death And Transfer?

By Author: Carl Glendon
Total Articles: 72
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Using a transfer on death deed form in Illinois means you can clearly identify who inherits your property. However, it will not cover any property tax or insurance costs. As such, there needs to be an arrangement in place for your family to pay for any bills, maintain insurance and protect the property.

When Does Ownership Pass?

A Transfer on Death Instrument (TODI) is the legal name for the document you will use. In general, if you have a legitimate Transfer on Death Instrument then ownership will pass once you pass away. The beneficiaries will gain ownership of the property, but this will include any outstanding mortgages, liens and other charges. Any delays whilst completing the documents will not mean payments are paused.

As such, you should make sure that payments are organised with the beneficiary. Depending on the bill and how the estate is being handled, there may be some payments made by the estate to cover any outstanding bills.

Who Pays for Property Tax?

The beneficiary should ensure ...
... that there are no outstanding payments, what the due dates are and if there is a mortgage escrow account. If the taxes are being managed by a servicer then you should also confirm that payments will still be made.

If more than one person is inheriting then they should agree how much everyone will pay. Someone should be appointed to keep track of payments. It is a good idea to keep a written record so that you know who has paid and if there has been an agreement to repay them. Failing to pay on time may incur extra costs.

Who Covers Insurance?

After the owner has passed away you should contact the insurer. Ensure that you know who needs to be insured, how to pay for the premium and if the current policy is suitable.

Just because you are paying for the premium doesn’t mean that it is the right policy. If the property falls empty then there may be restrictions on the policy. An endorsement or separate empty home policy may be required.

Who Should Use This Service?

A transfer on death deed form in Illinois may be suitable if you want to pass on real estate to specific beneficiaries without going through probate. If there are complications such as married couples, joint ownership, mortgages and different expectations around inheritance then it is a good idea to have a professional look over this.

Ensure that the service you choose will look over ownership, confirm the legal description, explain the options for the beneficiary and give clear guidance on how to execute and register the deed.

How Does It Work?

The owner will specify who the beneficiaries are and sign the necessary documents. Once registered it can then be updated using a notice of death affidavit.

A transfer on death deed form in Illinois will not prevent claims from creditors or provide funds to maintain the property. You should discuss how payments will be made, how much cash is available and any scenarios which may require bespoke legal advice before signing.

Author Bio:-

Carl often writes about legal drafting, legal documents, legal forms, and legal agreements to help people who need them. You can find his thoughts at property transfer deed blog.