A transfer on death deed lets you name someone who will automatically receive your real estate when you die, without the property passing through probate. You keep complete control while you’re alive: you can sell the home, mortgage it, or change your mind about the beneficiary at any time. The beneficiary gets nothing until your death, and even then they take the property with every mortgage, lien, and potential creditor claim still attached. About 29 states and the District of Columbia recognize these deeds; in the rest, the document has no legal effect no matter how carefully it’s drafted.
How It Works While You’re Alive
You sign a deed naming a beneficiary, record it with your county, and the transfer happens automatically at your death. During your lifetime, the beneficiary has no ownership interest, no right to use the property, and no ability to borrow against it. You don’t need their permission to sell, refinance, or revoke. You don’t even have to tell them the deed exists.
This is nothing like adding someone to your title. A transfer on death deed is closer to an instruction that only activates when you die. If you sell the property before then, the deed becomes meaningless because you no longer own what it was supposed to transfer. The beneficiary’s own creditors can’t reach the property either, since the beneficiary holds no current interest in it.
To sign one, you need the same mental capacity required to execute a valid will: understanding what you own, who your beneficiaries are, and what the document does. Any serious question about capacity at signing leaves the deed open to challenge after your death.
Which States Allow Them
Roughly 29 states plus the District of Columbia have statutes authorizing transfer on death deeds, many based on the Uniform Real Property Transfer on Death Act. If your property is in a state that doesn’t recognize them, the deed is void. Before investing time in the process, confirm your state allows it. A call to the county recorder’s office or a local attorney answers the question in minutes.
Even among states that permit them, the rules aren’t identical. Execution requirements, revocation procedures, and creditor protections vary. That matters especially if you own property in more than one state, because each parcel is governed by the law where it sits.
Creating and Recording the Deed
Most states provide a statutory form, available through the county recorder or state legal resources. Accuracy is everything. A wrong lot number or a transposed digit in the parcel number can render the whole deed ineffective.
Information You’ll Need
- Your legal name exactly as it appears on the current recorded deed. Small discrepancies between documents create title problems.
- The beneficiary’s full legal name and current mailing address. No nicknames, no descriptions like “my oldest child.”
- The legal description of the property. This is not the street address; it’s the lot, block, and metes-and-bounds language from your recorded deed.
- The assessor’s parcel number, found on your property tax bill or the assessor’s website.
You can name individuals, multiple people, or organizations like charities. If you name more than one beneficiary, specify how the property should be divided; the default in most states is equal shares. If you want a backup in case your first choice dies before you, name a contingent beneficiary directly on the deed.
Signing and Recording
Every state requires the grantor to sign in front of a notary. A handful also require two witnesses. The beneficiary does not need to sign, be present, or know the deed exists.
After notarization, file the original with the county recorder or registrar of deeds in the county where the property is located. Recording fees generally run somewhere between $15 and $150.
Here is the trap that catches people: the deed must be recorded before you die. An unrecorded transfer on death deed is void in most states. You cannot sign it, put it in a drawer, and expect your family to file it after your funeral. Record it right away.
Changing Your Mind
You can revoke a transfer on death deed at any time, without the beneficiary’s consent and without explaining why. But the revocation has to follow the same formalities as the original.
- Record a revocation instrument: a notarized document that expressly cancels the earlier deed, filed with the same county office before your death.
- Record a new transfer on death deed naming a different beneficiary, which supersedes the old one for the same property.
- Sell or transfer the property during your lifetime, which leaves the deed with nothing to act on.
Destroying your copy or crossing out the beneficiary’s name does nothing. The deed is already part of the public record, and physical acts against your own copy don’t change what’s recorded. The revocation itself must be recorded before your death.
What the Beneficiary Actually Inherits
Skipping probate is not the same as handing someone a free-and-clear house. The beneficiary takes the property subject to every mortgage, lien, and encumbrance that exists at the owner’s death. A $150,000 mortgage at death is a $150,000 mortgage the beneficiary now has to deal with.
Federal law does protect the beneficiary from one specific problem. Many mortgages include a due-on-sale clause letting the lender demand full repayment when the property changes hands. Under the Garn-St. Germain Act, a lender cannot accelerate the loan when property transfers to a relative because of the borrower’s death.1Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions The beneficiary still has to keep making the payments.
Creditor Claims
Transfer on death deeds skip probate but don’t necessarily escape the owner’s creditors. Under the framework most states use, if the probate estate can’t cover the owner’s debts, creditors can reach property that passed through the transfer on death deed. The beneficiary may be forced to pay a proportional share of what the owner owed. This is the most commonly misunderstood part of these deeds.
Medicaid Estate Recovery
If the owner received Medicaid benefits, the state has a right to recover those costs from the estate. Federal law requires every state to seek recovery from the probate estate and lets states extend that reach to property passing outside probate, including through transfer on death deeds.2Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets Whether a particular state uses that expanded authority varies. If the owner ever received Medicaid, the beneficiary should assume the property could be subject to a recovery claim and talk to an attorney before selling or transferring it. Some states require a Medicaid disclosure form before the county will even record the ownership change.
If the Beneficiary Dies First
This is where transfer on death deeds quietly fail. In many states following the Uniform Act, if your named beneficiary dies before you and you haven’t named an alternate, the share lapses. The property does not pass to the deceased beneficiary’s children. It falls back into your probate estate, which is exactly what you were trying to avoid.
Some states apply antilapse rules that redirect the share to the deceased beneficiary’s descendants, but only when the beneficiary was a close relative. The reliable fix is to name a contingent beneficiary on the deed itself. It costs nothing and prevents one unexpected death from unraveling the whole plan.
What the Beneficiary Does After Your Death
The property transfers automatically by operation of law, but the public records won’t catch up until the beneficiary takes a few steps. They’ll need a certified copy of the death certificate and an affidavit of death or similar notice form, filed with the county recorder where the original deed was recorded. That filing tells the public and the tax assessor that ownership has shifted without a court order. Once it’s recorded, the beneficiary can manage, sell, or refinance as the new owner.
There’s usually no hard deadline, but delays create practical problems. Until the record is updated, the beneficiary can’t sell or refinance, and property tax bills keep arriving in the deceased owner’s name.
Tax Treatment
Property received through a transfer on death deed qualifies for a step-up in cost basis under federal tax law. Instead of inheriting your original purchase price, the beneficiary’s basis resets to the fair market value on the date of your death.3Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent If you bought the house for $100,000 and it’s worth $400,000 at your death, the beneficiary’s basis is $400,000. If they sell for $410,000, they owe capital gains tax only on the $10,000 gain.
Signing the deed does not trigger gift tax, because the beneficiary receives nothing until you die. That’s an advantage over adding a child to the deed during your lifetime, which can create gift tax problems and wipes out the step-up in basis.
The deed does not remove the property from your taxable estate. For 2025, the federal estate tax exemption is $13.99 million per individual, so only very large estates are affected. The exemption is scheduled to drop significantly after 2025 unless Congress acts.
Transfer on Death Deed or Living Trust?
Both tools move property to someone you choose without probate. Which one fits depends on how complicated your situation is.
- Cost: a transfer on death deed usually runs only the recording fee. A living trust means attorney fees, often several hundred to a few thousand dollars.
- Scope: a transfer on death deed covers one property in a single document. A trust can hold multiple assets with detailed distribution instructions.
- Incapacity: a transfer on death deed does nothing if you become incapacitated but are still alive. A trust with a successor trustee lets someone manage the property for you without a court-supervised guardianship.
- Minor beneficiaries: naming a minor on a transfer on death deed means they own the property outright at 18. A trust can hold it until an age you set.
- Multiple states: if you own real estate in more than one state, you’d need a separate transfer on death deed recorded in each state that allows them. A trust can hold properties across state lines under one document.
If you own one home in a state that recognizes these deeds and want a cheap, simple way to keep that property out of probate, a transfer on death deed is hard to beat. For larger or more complicated estates, families with minor children, or anyone who needs an incapacity plan, a living trust does things a transfer on death deed can’t.