Transfer-on-death deed: pass on a home without probate

Ruth was 74 when she found out she could leave her house to her nephew with a two-page form. She'd assumed she needed a trust, and the estate attorney she'd called quoted $3,000 to set one up. Then her neighbor mentioned that she'd done something called a transfer-on-death deed at the county recorder's office for about $40.

A transfer-on-death deed lets you name someone who will inherit your home when you die, without the house going through probate. You keep full ownership while you're alive. This guide covers how a transfer-on-death deed works, which states allow it, how to record one correctly, and the situations where it causes more trouble than it solves. The rules differ a lot between states, so treat this as a starting point and confirm the details with your county recorder or a local attorney.

What a transfer-on-death deed is

A transfer-on-death deed (also called a TOD deed or beneficiary deed) is a real estate deed that only takes effect when the owner dies. You sign it, record it with the county, and nothing changes during your lifetime. When you die, the property passes straight to the person you named.

Cornell's Legal Information Institute defines it as a deed that "automatically transfers property to a designated beneficiary upon the death of the property owner without probate." The beneficiary has no access to the house until then. They can't borrow against it, and they don't even need to know the deed exists.

It's the real estate version of the payable-on-death designation you can put on a bank account. If you've already read our post on beneficiary designations, the logic is the same. The paperwork names who gets the asset, and that name wins over whatever your will says.

The appeal is mostly about avoiding probate. In many families the house is the only asset big enough to force a full court case. Retirement accounts and life insurance already go to named beneficiaries, and modest bank balances can often be collected with a small estate affidavit. Take the house out of the equation and the estate may never see a courtroom.

Which states allow transfer-on-death deeds

About 30 states and Washington, D.C. currently allow transfer-on-death deeds for real estate. Missouri was the first, back in 1989. Many states have since adopted some version of the Uniform Real Property Transfer on Death Act, a model law published by the Uniform Law Commission in 2009.

The list includes California, Texas, Ohio, Illinois, Arizona, Colorado, Virginia, Washington, Oregon, Minnesota, and Nevada, among others. New York joined in July 2024. A few states, including Florida, don't have a TOD deed statute but recognize a similar tool called an enhanced life estate deed, often nicknamed a "Lady Bird deed." Pennsylvania has neither.

States keep adding these laws, and the details change when they do. California, for instance, now requires two witnesses on top of a notary, a rule that wasn't in its original statute. Before you fill anything out, look up your county recorder's or clerk's website. Most of them say plainly whether they accept TOD deeds and many link to the form.

How to create a transfer-on-death deed

Most people can complete a TOD deed in an afternoon. The steps are simple, but small errors (a misspelled legal description, a missing witness) can make the deed invalid, and nobody will notice until after you've died.

1. Get your state's form. Many county recorders and state court self-help sites publish one. Some states don't have an official form, and you'll want an attorney or a reputable form service.
2. Copy the legal description of the property exactly as it appears on your current deed. A street address alone usually isn't enough.
3. Name your beneficiary by full legal name. Add an alternate beneficiary in case your first choice dies before you do.
4. Sign in front of a notary, plus witnesses if your state requires them.
5. Record the deed with the county recorder in the county where the property sits. Pay the recording fee, which is often under $100.
6. Keep the recorded copy with your other important papers and tell someone where it is.

The recording deadline is the step people miss

A transfer-on-death deed that isn't recorded before you die is generally worthless. Signing it and putting it in a drawer does nothing. Some states set an even tighter clock; California requires recording within 60 days of signing.

I'd also suggest pulling a copy from the county after it's recorded, just to confirm it actually went through. Recorders do occasionally reject documents for formatting problems, and the rejection letter can get lost in the mail.

Mistakes that undo a TOD deed

The most common TOD deed problems show up after the owner dies, when it's too late to fix them. A few are worth thinking through ahead of time.

The first is forgetting an alternate beneficiary. In many states, if your named beneficiary dies before you and you never updated the deed, the gift lapses. The house falls back into your probate estate, which is exactly what you were trying to avoid. Naming a backup costs one extra line on the form.

Naming several people is the second trap. If you leave the house to your three children equally, they'll own it together as co-owners. That's fine when everyone gets along and agrees to sell. It gets painful when one sibling wants to move in, another wants cash, and the third lives overseas and stops answering email. If you expect disagreement, a trust with a trustee who has authority to sell may suit your family better. Our comparison of wills vs trusts walks through that choice.

Leaving a house directly to a minor causes its own problems. A 12-year-old can't legally manage real estate, so a court may have to appoint a guardian or conservator anyway. Some states let you name a custodian on the deed under the Uniform Transfers to Minors Act. Ask about that if a grandchild is your intended beneficiary.

People also sometimes assume their will can override the deed. It can't. Picture a father who records a TOD deed naming his son in 2015, then remarries and writes a new will in 2023 leaving the house to his second wife. The recorded deed controls. His wife, who's been living there for eight years, may find out at the worst possible moment that she doesn't own her home. If your life changes, the deed needs to change with it.

What a transfer-on-death deed won't do

A TOD deed avoids probate, but it doesn't make the house disappear from the rest of the estate process. The beneficiary takes the property with any mortgage, liens, and unpaid property taxes still attached.

In most states the beneficiary can also be on the hook if the rest of the estate can't cover the person's debts or final expenses. Some states can pursue the home through Medicaid estate recovery if the owner received long-term care benefits. That rule varies widely, and it's one of the better reasons to have a short conversation with an elder law attorney if Medicaid is in the picture.

On the tax side, the news is mostly good. Property received this way usually gets a stepped-up basis, which means the home's value for tax purposes resets to its fair market value on the date of death. The IRS explains how basis works for inherited property in Publication 551. If Ruth bought her house for $60,000 in 1982 and it's worth $410,000 when she dies, her nephew's basis is $410,000, not $60,000. If he sells soon after, there may be little or no capital gains tax. This is a general explanation and not tax advice, so a CPA is worth consulting before any sale.

What the beneficiary does after the owner dies

Claiming a house through a TOD deed is usually quick. The beneficiary records a certified copy of the death certificate with the county recorder, often along with a short affidavit confirming the death and their identity. Some states require them to wait a set period or send notice to the estate first.

After that, the title is in their name. They'll want to call the homeowner's insurance company right away, because a policy in a deceased person's name may not cover a vacant house. They should contact the mortgage servicer too, if there is one. Federal law (the Garn-St. Germain Act) generally prevents lenders from demanding full repayment just because a relative inherited the home, so the beneficiary can usually keep making the existing payments.

It helps if the owner leaves a note about the practical stuff. Where the spare keys are, which contractor fixed the roof, the fact that the basement floods if the sump pump fails. None of that is on a deed, and it's often what the person inheriting the house wishes they'd been told.

Is a TOD deed right for you?

A transfer-on-death deed tends to work well for someone who owns one home, lives in a state that allows it, and has a clear idea of who should get it. It's cheap, it's revocable, and you can record it without hiring anyone.

It tends to work less well when you own property in several states, when you want someone to manage the house for a beneficiary who isn't ready to, or when your family is likely to fight about it. Those situations usually call for a trust or at least a conversation with an estate planning attorney. Our post on alternatives to a will lays out the other tools side by side.

Ruth recorded her deed on a Tuesday. She named her nephew Daniel and, after some thought, his daughter as the alternate. Then she wrote him a letter that explained why she'd chosen him, mentioned that the peach tree in the backyard only fruits every other year, and asked him not to feel guilty if he ended up selling. If you'd like a place to keep the recorded deed together with a letter like Ruth's, When I Die Files can hold both, so the person who inherits your home gets the paperwork and the reasons at the same time.