A transfer on death deed lets you name who inherits your house when you die, without sending the property through probate. You sign it, record it with the county, and keep full ownership and control of the home for the rest of your life. The named beneficiary has no legal interest until the moment of your death, at which point title passes automatically. About 32 U.S. jurisdictions authorize these deeds, so the first question is always whether your state is one of them. The paperwork itself is simple; the surprises tend to come from mortgages, creditor claims, and Medicaid recovery.
How the Deed Works Before and After Death
A transfer on death deed, sometimes called a beneficiary deed, is a recorded document naming who gets your real estate when you die. It has no effect during your life. You can sell the property, refinance it, rent it out, or let it sit. The beneficiary has no say in any of that and no ownership stake until you die.
That is the difference from a will. Property left by will has to move through probate, where a court supervises the transfer and creditors get a window to make claims. A TOD deed routes the house around that process entirely. Your beneficiary still has some paperwork to file after your death, but no judge has to approve the transfer and no probate estate has to be opened for the house.
Whether Your State Allows a TOD Deed
Roughly 32 jurisdictions—a little over half the country—have authorized transfer on death deeds by statute, many based on the Uniform Real Property Transfer on Death Act. The rest either don’t allow them or use different non-probate tools like enhanced life estate deeds, sometimes called lady bird deeds. Before drafting anything, confirm your state permits TOD deeds and check for state-specific quirks: some require witnesses in addition to notarization, and some have mandatory statutory forms that a generic template won’t satisfy.
What Goes on the Deed
The information requirements are narrow and unforgiving. You need your full legal name exactly as it appears on your current deed of record, the full legal name and mailing address of each beneficiary, and the legal description of the property. The legal description is not the street address. It’s the formal description on your existing deed: lot and block numbers, a metes-and-bounds description, or a plat reference. Copy it exactly.
Many states publish a statutory form that you’re either required or strongly encouraged to use. Your county recorder’s office or the state legislature’s website is where to find it. A generic form pulled from a document website when your state has a mandatory form is a mistake that won’t surface until after you’ve died, which is the worst possible moment for it to surface.
After filling out the form, you sign it in front of a notary public. The notary verifies your identity and applies an official seal. Some states also require one or two witnesses to watch you sign, so check the rule before the appointment.
Recording the Deed Before You Die
This step is not optional. A TOD deed sitting in your filing cabinet is worthless. You have to file it with the county recorder’s office in the county where the property is located, and you have to do it before you die. If it isn’t recorded by your date of death, the deed has no legal effect and the house falls into your probate estate as though the deed never existed.
You can file in person or by certified mail. The recorder reviews the document for formatting, records it, and assigns an instrument number. Recording fees vary but generally fall between $10 and $100. Keep the receipt with the instrument number. Your beneficiary will need it later.
Recording creates a public record of your intent. It does not transfer ownership yet. You still own the property and can still do whatever you want with it.
What the Beneficiary Does After You Die
Your beneficiary doesn’t appear in county records as the new owner the moment you die. To clear title, they need to take a few steps.
- Obtain a certified death certificate from the local vital records office or department of health. A photocopy usually won’t do.
- Prepare an affidavit of death, sometimes called a notice of death or affidavit of surviving beneficiary. It confirms you’ve died and references the recorded TOD deed by its instrument number.
- Sign the affidavit before a notary and record it with the same county recorder’s office that has the original TOD deed.
Filing fees for these documents generally run $15 to $50. Once the recorder processes everything, the public record shows the beneficiary as the new legal owner. No court hearing, no probate judge, no months of waiting. The whole thing can wrap up in a few weeks if the paperwork is clean.
There’s no universal deadline for filing the affidavit, but waiting causes problems. Until title is cleared, the beneficiary can’t sell, refinance, or insure the property in their own name, and delays make it harder to reconcile records if other claimants surface later.
What Happens to the Mortgage
A TOD deed transfers whatever you own, including debt attached to the property. If the house has a mortgage, the beneficiary takes the house with the loan still on it. The lender’s lien doesn’t go anywhere.
Federal law does prevent the lender from calling the loan due just because you died and the property passed. Under the Garn-St. Germain Act, a lender cannot enforce a due-on-sale clause when property transfers to a relative after the borrower’s death.1Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions The beneficiary can keep making the existing payments and stay in the home. If they want to assume the loan formally, the lender must allow it.
The practical question is whether the beneficiary can actually afford the payments, along with property taxes and insurance. A TOD deed doesn’t come with a life insurance policy attached. If the numbers don’t work, the beneficiary may end up selling a house they just inherited while grieving, which is rarely a good financial position. If you’re using a TOD deed for a property with a significant mortgage, an honest conversation with your beneficiary ahead of time is worth more than the deed itself.
Creditor Claims and Medicaid Recovery
One of the biggest misconceptions about TOD deeds is that they shield property from your debts. They don’t. The beneficiary takes the property subject to any existing liens: mortgages, tax liens, judgment liens, and similar encumbrances all survive the transfer.
More surprising to most people, in many states the beneficiary can be held personally liable for your unsecured debts up to the value of the property they received. If you owed $80,000 in medical bills and left a house worth $300,000 through a TOD deed, your creditors or estate may be able to recover that $80,000 from the beneficiary. The exposure is generally capped at the property’s net value, meaning fair market value minus existing liens, but it is real liability.
This is where TOD deeds differ from irrevocable trusts. Because the deed is revocable during your life and you keep full control of the property, the law treats the transfer as incomplete for creditor purposes. The property didn’t really leave your reach until you died, so creditors still have a path to it.
Medicaid estate recovery is a related risk with its own state-by-state twist. If you received Medicaid benefits for long-term care, your state may try to recover those costs after your death. Federal law has required states to pursue estate recovery since 1993, but how far they reach into non-probate assets varies. About half of states limit recovery to assets that pass through probate, which generally protects property transferred by TOD deed. The other states use an expanded definition of “estate” that can pull in TOD deed transfers. If Medicaid is part of your picture, the specific state rule matters a great deal, and professional advice is worth the cost.
Tax Treatment
Step-Up in Basis
Property transferred through a TOD deed qualifies for a step-up in basis under federal tax law. The beneficiary’s tax basis resets to the fair market value on the date of your death rather than what you originally paid.2Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent
This matters if you’ve owned the house a long time. Say you bought it for $120,000 thirty years ago and it’s worth $450,000 when you die. If you had gifted the property during your life, the recipient would inherit your $120,000 basis and owe capital gains tax on $330,000 of appreciation when they sold. With a TOD deed, the basis resets to $450,000. A sale shortly after your death at roughly market value produces little or no capital gains tax. This single benefit is often the strongest reason to use a TOD deed instead of a lifetime gift.
Federal Estate Tax
Property passing through a TOD deed still counts as part of your taxable estate, the same as property passing through a will or a revocable trust. For 2026, the federal estate tax exemption is $15,000,000 per individual and $30,000,000 for a married couple using portability.3Internal Revenue Service. Whats New – Estate and Gift Tax Most homeowners using TOD deeds fall well below that line. Some states impose their own estate or inheritance taxes at lower thresholds, so check whether yours does.
Property Tax Reassessment
Whether the transfer triggers a property tax reassessment depends on the state and county. Some jurisdictions reassess when ownership changes, which can produce a sharp increase if the house hasn’t been reassessed in decades. Others exempt transfers at death or transfers to close relatives. The county assessor’s office can tell you what to expect, and it’s worth asking before you finalize the plan.
Revoking or Changing the Deed
You can cancel or change a TOD deed at any time during your life. Nobody’s permission is needed, including the beneficiary’s. There are three common ways to do it.
- Record a formal revocation with the same county recorder’s office. Most states have a statutory revocation form.
- Record a new TOD deed naming a different beneficiary. The most recently recorded deed controls.
- Sell the property or move it into a trust during your life. Once the property is gone from your ownership, there’s nothing left for the deed to transfer.
One thing that does not work: tearing up your copy. Destroying the paper doesn’t revoke anything. The recorded version in the county’s files is what matters, and it stays on record until you file a revocation or replacement. People who assume shredding the document is enough sometimes leave behind a valid deed they thought they canceled years earlier. And any revocation must itself be recorded before you die, or it has no effect.
If the Beneficiary Dies First
Under the Uniform Real Property Transfer on Death Act and most state versions, the beneficiary’s interest is contingent on surviving the property owner. If your beneficiary dies before you do, the deed lapses. The property does not pass to the deceased beneficiary’s heirs; it falls back into your estate and moves through probate or under your will.
You can protect against this by naming an alternate beneficiary on the original deed, if your state’s form allows it, or by recording a new deed after the original beneficiary dies. If you named several beneficiaries and only one predeceases you, most states divide that person’s share among the survivors. Reviewing the deed every few years to confirm your named beneficiaries are still alive and still the people you want is basic maintenance that many people skip.
Effect of Divorce
Many states automatically revoke a TOD deed naming a spouse as beneficiary once the couple divorces. This mirrors how most states treat beneficiary designations on life insurance and retirement accounts. Not every state has this automatic rule, though, and relying on it without checking is risky. The safer move is to record a revocation or a new deed as soon as a divorce is finalized. Separation without a finalized divorce generally leaves the original deed fully in effect.
Common Mistakes That Undermine These Deeds
Most failures come from the same handful of errors.
- Not recording the deed before death. This is the number-one killer. An unrecorded deed is void, and the property goes through probate.
- Using the street address instead of the legal description. The county will reject the filing or a court may later void the deed.
- Ignoring state-specific form requirements. Some states mandate a particular statutory form and will not accept anything else.
- Failing to update after life changes. A beneficiary who predeceases you, a divorce you didn’t account for, or a new property acquired after the deed was recorded can leave gaps.
- Treating the deed as a complete estate plan. It skips probate, but it doesn’t erase the mortgage, creditor claims, potential Medicaid recovery, or property tax consequences.
A TOD deed works well as one piece of a broader plan. For a house with no mortgage, no serious creditor concerns, and a beneficiary ready to take on the property, it’s one of the simplest and cheapest estate planning tools available. When the picture is more complicated, with multiple heirs, outstanding debts, Medicaid exposure, or property in a state that doesn’t recognize these deeds, a revocable living trust or another tool may do the job more completely.