A transfer on death deed works by letting you name, in a recorded deed, the person who will inherit a specific piece of real estate when you die, while you keep full ownership and control during your lifetime. You sign the deed, have it notarized, and file it with the county recorder where the property sits. Nothing changes while you’re alive. You can sell the property, mortgage it, or tear up the plan and name someone else. At your death, the named beneficiary records a death certificate and a short affidavit, and title moves to them without probate.
What the Deed Actually Does
A TOD deed, sometimes called a beneficiary deed, is a present document with a future effect. You execute and record it now, but it transfers no interest until the moment of your death. Until then you are the owner for every purpose: you can live in the home, rent it, refinance it, sell it, or revoke the deed outright. The beneficiary has no rights, no say, and nothing to sign. They don’t even need to know the deed exists.
Because the deed is revocable, the transfer isn’t completed for tax or Medicaid purposes while you’re alive. That’s what makes it different from signing your house over to your children today. You’re not giving anything away. You’re setting up a transfer that only takes effect if the deed is still on record when you die.
Whether Your State Allows One
As of 2026, roughly 33 states have enacted statutes authorizing transfer on death deeds. Most follow a framework based on the Uniform Real Property Transfer on Death Act. Several large states still do not recognize the instrument. Florida, for instance, relies on enhanced life estate deeds instead. If your state has no enabling statute, a TOD deed is worthless no matter how carefully it’s drafted. Confirm authorization through your county recorder’s office or your state legislature’s website before you spend anything on drafting.
What the Deed Needs To Contain
The document itself is short, but every detail matters. It must list your full legal name and current mailing address as the transferor, and the full legal name of each beneficiary. The property has to be identified by its legal description, not just a street address. Legal descriptions use lot and block numbers or metes and bounds coordinates. You’ll find yours on your existing deed, your title insurance policy, or your county’s property tax records.
Most states publish a statutory form, and using it prevents challenges later. Some states require specific warning language on the form itself, confirming that the deed is revocable and transfers no ownership until death. Attorney preparation or use of a state template typically costs between $350 and $1,500.
Capacity To Sign
You need legal capacity to execute a TOD deed. Most states apply the same standard used for making a will: you must understand what property you own, who your natural heirs are, and what the deed does. If cognitive decline is a concern, a capacity evaluation before signing can head off a later challenge.
Spousal Consent
If you’re married, don’t assume you can sign alone. Many states require your spouse to join in the deed or consent in writing, especially for homestead property. A spouse who didn’t consent may retain marital or statutory rights that override the beneficiary designation. The safest practice is for both spouses to sign.
Signing and Recording
You sign the completed form in front of a notary public, who verifies your identity and confirms you signed voluntarily. A handful of states also require one or two independent witnesses. Check your state’s execution rules before the appointment.
Then you take the notarized deed to the county recorder in the county where the property sits and file it in the public land records. This is the step people get wrong. The deed must be recorded while you are alive. An unrecorded deed found in a drawer after your death is generally void, and the property falls into your probate estate as if the deed never existed. Some states impose additional timing requirements; California, for instance, requires recording within 60 days of signing.
Recording fees run roughly $15 to $75 depending on page count and county. Notary fees for a single signature range from about $5 to $25 in most states. Compared with setting up a trust, the paperwork is fast and cheap.
Changing Your Mind Later
One of the biggest advantages of a TOD deed is that you can undo it whenever you want, without anyone’s permission and without notifying the beneficiary. Three common methods work:
- Record a formal revocation form that references the original deed’s recording information, signed and notarized, filed with the same county recorder. It must be recorded before your death to take effect.
- Record a new TOD deed naming someone else. The most recently recorded deed controls.
- Sell or transfer the property. If you no longer own the interest the deed was supposed to transfer, the deed becomes meaningless on its own.
A will cannot revoke a TOD deed. If your will says one thing and your recorded TOD deed says another, the deed wins. If you update your estate plan, address any outstanding TOD deeds at the same time.
Divorce
Several states automatically revoke a TOD designation in favor of a former spouse at divorce or annulment. Not every state does, and automatic revocation is a risky thing to rely on. After a divorce, record a formal revocation or a new deed naming your intended beneficiary.
What the Beneficiary Does After Your Death
The property doesn’t transfer itself. The beneficiary has to take a few steps to put legal title in their name and update the public record.
First, obtain a certified copy of the death certificate from the state or county vital records office. Certified copies typically cost between $5 and $34 depending on the state. Next, prepare an affidavit of death (sometimes called a notice of death or affidavit of survivorship) that identifies the deceased owner, references the recorded TOD deed, and states that you are the named beneficiary. File the affidavit and the certified death certificate with the county recorder where the property is located.
Recording fees are similar to the original filing costs. Once the recorder processes the paperwork, the county updates its tax records to reflect your ownership, and the chain of title is clean enough for a title insurance company to insure the property. From that point you have full authority to live in the home, sell it, or refinance it, with no probate court involved.
Mortgages, Liens, and Other Debts
A TOD deed transfers ownership but does not wipe away debt. The beneficiary takes the property subject to every mortgage, tax lien, judgment lien, and other encumbrance in place at the owner’s death. Under the Uniform Act and virtually every state statute modeled on it, recording of the TOD deed is treated as having occurred at the transferor’s death for lien priority purposes, so anything recorded before that date attaches to the beneficiary’s interest.
Federal law does protect the beneficiary from one common worry: a lender calling the whole mortgage due. The Garn-St. Germain Act prohibits lenders from enforcing a due-on-sale clause when property transfers because of the borrower’s death, including transfers to a relative of the deceased borrower.1Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-On-Sale Prohibitions The mortgage itself doesn’t disappear. The beneficiary must continue making payments or refinance in their own name. Property tax arrears and contractor liens carry the same risk; ignore them and the property can be sold out from under you.
Taxes
No Gift Tax at Signing
Recording a TOD deed is not a taxable gift. Because the deed is revocable and transfers nothing during your lifetime, the IRS does not treat it as a completed gift. You owe no gift tax and use none of your lifetime exemption when you sign.
Estate Tax Inclusion
Property covered by a TOD deed is included in the owner’s gross estate for federal estate tax purposes. Because the owner kept the power to revoke the transfer at any time before death, the property falls under the rules for revocable transfers.2Office of the Law Revision Counsel. 26 USC 2038 – Revocable Transfers For 2026, the federal estate tax basic exclusion amount is $15,000,000 per person, so only estates exceeding that threshold owe federal estate tax.3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 A TOD deed avoids probate; it does not avoid estate tax.
Stepped-Up Basis
The beneficiary receives a stepped-up basis in the property equal to its fair market value on the date of the owner’s death.4Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent If the owner bought the house for $150,000 and it’s worth $450,000 at death, the beneficiary’s basis is $450,000. A sale soon after at that price produces little or no capital gains tax. A lifetime gift would have carried the owner’s original $150,000 basis forward, potentially creating a $300,000 taxable gain on sale.
Medicaid Estate Recovery
A TOD deed does not trigger Medicaid’s five-year look-back for long-term care eligibility, because the property stays in your name until death and nothing is transferred during your lifetime. The home continues to count as a resource under the homestead exemption rules most states apply to a primary residence while the owner is alive.
After death is the harder question. Federal law requires every state to run a Medicaid estate recovery program, and at minimum, states must seek repayment from assets that pass through probate.5ASPE. Medicaid Estate Recovery Some states stop there, with a narrow definition of “estate” that covers only probate property; in those states, a TOD deed effectively moves the home out of recovery’s reach. Other states define “estate” broadly to include non-probate assets like a TOD transfer, joint tenancy, or a living trust. In broad-definition states, a TOD deed may not shield the property from a Medicaid claim.
If the Beneficiary Dies First or You Co-Own the Property
If your only named beneficiary dies before you do, the TOD deed fails. The property won’t pass to that person’s heirs through the deed; it falls back into your probate estate and gets distributed under your will, or under state intestacy rules if you have no will. This is probably the most overlooked risk with these deeds, because people sign them and never revisit the document.
When a deed names multiple beneficiaries and one dies before the owner, the surviving beneficiaries generally split the deceased beneficiary’s share. Some states offer an anti-lapse option on the statutory form, letting you specify that a deceased beneficiary’s share passes to their own descendants. Others let you name alternate beneficiaries. These options vary by state, so read the form carefully and fill out every applicable section. Leaving a line blank because “it probably won’t matter” is how properties end up in probate.
Co-ownership adds its own wrinkle. If you own as joint tenants with right of survivorship, the survivorship right takes priority over a TOD deed. The first death passes the share to the surviving co-owner automatically, and the TOD deed only kicks in after the last surviving joint tenant dies. Both joint tenants need to sign the TOD deed to direct the property outside the joint tenancy. For property held as tenants in common, each owner controls only their share, and one tenant in common can file a TOD deed covering their interest without the other owner’s involvement.
When a Living Trust Is the Better Tool
A TOD deed is far simpler and cheaper than a revocable living trust, but that simplicity has trade-offs. A TOD deed covers one property and does one thing: transfer it at death. A living trust can hold multiple assets, stagger distributions over time, protect property from a beneficiary’s creditors, and include instructions for different scenarios.
The biggest practical gap is incapacity. If you become unable to manage your affairs, a living trust lets a successor trustee step in and handle the property, including paying the mortgage, arranging repairs, or selling if necessary, without going to court. A TOD deed does nothing during your lifetime, so it offers no help if you’re incapacitated. You’d need a separate power of attorney to cover that.
Trusts also give you more control over inheritances for minors. A trustee can manage property until the child reaches whatever age you choose. A TOD deed can designate a custodian under the Uniform Transfers to Minors Act, but the property must be turned over at the state-mandated age, often 21, whether the child is ready or not.
If your plan is straightforward (leave the house to adult children, skip probate), a TOD deed does the job cheaply. For complex family dynamics, significant assets, or concerns about future incapacity, a living trust is worth the higher upfront cost.