A transfer on death deed (commonly referred to as a TOD deed) is an estate planning tool that allows a person to name a beneficiary who will automatically inherit certain assets when the owner passes away, without the need for probate. While these deeds are available in many states, South Carolina does not currently recognize transfer on death deeds for real estate, which can create confusion for individuals looking to simplify their estate plans.
Understanding what a TOD designation can do, and where it falls short, is critical to making informed decisions about your estate.
What Is a TOD Designation?
A TOD designation allows the owner of an asset to name a beneficiary who will receive the asset directly upon the owner’s death. These designations bypass probate, meaning the asset goes straight to the named person without court involvement.
TOD designations are commonly used for:
- Bank accounts
- Investment and brokerage accounts
- Vehicles (in some states)
- Certain retirement accounts (although these are more often governed by beneficiary forms)
A similar designation is a TOD account, which is often used in financial institutions to streamline the transfer of funds to a named beneficiary.
How Transfer on Death Works in South Carolina
While TOD accounts, such as payable-on-death (POD) bank accounts or retirement accounts, are commonly accepted in South Carolina, the state does not allow a transfer on death deed for real estate.
This means you cannot use a TOD deed to automatically pass ownership of your home or land to a beneficiary upon your death. Instead, property generally passes through the probate process unless it is held in joint ownership or placed in a trust.
If you own real estate in South Carolina and want to avoid probate, you’ll need to consider alternative strategies, such as:
- Revocable living trusts
- Joint ownership with right of survivorship
- Life estate deeds (in some cases)
Each option has pros and cons depending on your goals, tax situation, and family structure.
What You Can (and Can’t) Transfer Using TOD in South Carolina
In South Carolina, you can use TOD designations for:
- Brokerage and investment accounts
- Certain retirement accounts
- Some bank accounts
You cannot use TOD deeds for:
- Real estate
- Vehicles (unless titled differently)
- Business ownership interests (in most cases)
Because the state does not currently permit transfer on death deeds, it’s important not to assume that all assets can bypass probate using this method. A common mistake is relying on TOD designations without a comprehensive estate plan. This leaves key assets exposed to the court process.
Can a Transfer on Death Deed be Contested?
Even in states where TOD deeds are legal, these documents can be contested under certain circumstances, such as claims of undue influence, fraud, or lack of capacity. While South Carolina does not allow TOD deeds for real property, disputes can still arise over TOD accounts or other non-probate transfers.
An improperly executed form, conflicting designations, or failure to update beneficiaries after life changes (such as divorce or remarriage) can lead to legal challenges and delays in asset distribution.
Common Problems with Transfer on Death Deeds
In states where TOD deeds are used, they are not without issues. Some of the most common problems include:
- Misunderstanding what can be transferred – Many people assume all assets can be passed using a TOD, which is incorrect, especially in South Carolina.
- Lack of coordination with other documents – If your will or trust says one thing, and your TOD designation says another, the conflict can lead to disputes.
- Unintended disinheritance – Failing to update a TOD after major life events can unintentionally leave someone out or create confusion.
- No protections for minor beneficiaries – TOD designations do not set up safeguards for young heirs, who may be unable to manage assets responsibly.
This is why TOD designations should never be used as a standalone estate plan.
Creating an Estate Plan in SC
A well-drafted estate plan provides clarity, protects your family, and ensures that all assets, whether governed by probate or non-probate rules, are distributed according to your wishes.
In South Carolina, estate planning should take into account that transfer on death deeds are not available, and therefore real estate must be addressed through other legal mechanisms.
At McCutchen McLean, we help clients navigate these complexities with customized strategies tailored to their family needs, asset types, and future goals. From wills and trusts to probate, our team is committed to delivering legal guidance that gives families peace of mind. If you’re ready to take control of your estate plan, contact us today to schedule a consultation.
