Transfer on Death Deeds: Passing a Home Without Probate

A transfer on death (TOD) deed, sometimes called a beneficiary deed, lets you name who gets your real estate when you die while keeping ownership during your life. Only some states allow it.

How it works

• You stay the owner and can sell or mortgage the property.
• The deed names one or more beneficiaries.
• At your death the property passes to them outside probate, after required steps.
• You can usually revoke or change it before death.

Benefits

• Avoids probate for that property.
• No gift during life, so the recipient may receive a stepped-up tax basis in many cases.
• Low cost compared with some trusts.

Limits and risks

• Not every state allows TOD deeds.
• Recording requirements and timing must be followed exactly.
• Debts and Medicaid estate recovery may still reach the property.
• Names must be kept up to date or a beneficiary may die first or be omitted.
• It can conflict with a will if it is not coordinated.

Next steps

1. Confirm your state allows it.
2. Talk to an estate planning attorney if the property is valuable or family relationships are complex.
3. Record the deed before death as your state requires.
4. Review it after major life changes.

How the deed is created and what happens at death

A transfer on death deed is signed, notarized and recorded during the owner's lifetime, but it takes effect only at death. The owner can generally sell, mortgage or change the deed without the beneficiary's consent. At death, the beneficiary typically records an affidavit or other documents and proof of death to complete the transfer. In many states, the deed must be recorded before the owner dies to be valid.

States and variations

• Many states have statutes allowing TOD or beneficiary deeds, while some have none.
• Names differ: transfer on death deed, beneficiary deed or lady bird deed in a few states.
• Some states allow limited forms such as enhanced life estates.
• Rules differ on revocation, lapse and creditor claims.
• Check your state's requirements before using a form.

Benefits and tradeoffs

1. Avoids probate for the property.
2. Owner keeps control and can revoke.
3. Beneficiaries may get a stepped-up tax basis at death.
4. Low cost.
5. May not protect against Medicaid estate recovery or creditors.
6. Requires careful naming of beneficiaries and contingent beneficiaries.

Common mistakes

• Not recording the deed in time.
• Naming minors without a plan for management.
• Forgetting to coordinate with a will or trust.
• Failing to update after a beneficiary dies or a family change.
• Using a deed form from another state.

When another tool may be better

If several people will share the property, a trust may offer better management. If you want to protect a beneficiary with special needs, a special needs trust may be needed. See our guides to gift deeds, living trusts and special needs trusts.

Frequently asked questions