The Ohio Court of Appeals upheld a ruling regarding the estate of Eleanor M. Hovanick, affirming that a transfer on death designation (TODD) affidavit does not apply if the property was sold before her death. The case, Estate of Hovanick (2026-A-0014), affects how beneficiaries of a TODD affidavit may receive property and its proceeds after the owner's death.
The court's decision clarifies the legal implications of transferring property through a TODD affidavit and the doctrine of equitable conversion. This ruling is significant for future estate cases involving similar circumstances.
Background
The parties involved in this case are Carol Mohr and Michele Boiarski, who are the exceptors, and Lucinda A. Hovanick, the executor of Eleanor M. Hovanick's estate. The dispute centers around a TODD affidavit signed by Eleanor Hovanick in 2010, which designated certain beneficiaries to receive her property upon her death. However, before her death, Eleanor sold the property, leading to questions about whether the sale proceeds should go to the estate or the designated beneficiaries.
The case began when Eleanor signed a purchase and sale agreement with the Western Reserve Land Conservancy (WRLC) to sell nearly 62 acres of real estate for $350,000. Eleanor passed away shortly after the agreement was finalized. Her will, executed months earlier, left her property to different individuals, not including the beneficiaries named in the TODD affidavit.
The Ruling
The Ohio Court of Appeals, led by Judge Eugene A. Lucci, ruled that the TODD affidavit did not survive the sale of the property. The court concluded that the doctrine of equitable conversion applied, stating, "the proceeds of a sale of real estate subject to a transfer on death affidavit, where the contract of sale was entered prior to the decedent’s death, become personal property and are assets of the decedent’s estate."
The trial court had initially agreed with the exceptors, but the appellate court clarified that the legal title to the property was held in trust for the buyer, WRLC. Thus, the proceeds from the sale were considered personal property and part of the estate, not the beneficiaries of the TODD affidavit.
Impact
This ruling sets a precedent in Ohio regarding how TODD affidavits interact with the sale of property before death. It clarifies that if a property owner sells real estate before their death, the proceeds from that sale are treated as personal property and are subject to the decedent's will, rather than being transferred to the beneficiaries named in a TODD affidavit.
The decision affects future cases involving TODD affidavits and property sales, ensuring that estate executors and beneficiaries understand the implications of equitable conversion. This ruling may also influence how individuals approach estate planning and the execution of TODD affidavits in Ohio.
What's Next
The ruling can potentially be appealed to the Ohio Supreme Court, but details regarding any related cases or further proceedings were not available in the court filing. As it stands, the decision provides clarity for future estate disputes involving similar issues.