A transfer on death deed is a recorded document that names a person to inherit your real estate automatically when you die, with no probate required. You keep full ownership and control of the property while you’re alive, and the beneficiary gets nothing until your death. It’s one of the cheapest and simplest ways to pass a house to a chosen heir, provided your state recognizes the tool.
How a Transfer on Death Deed Works
The deed creates a future interest that sits dormant during your lifetime. The person you name has no legal rights to the property while you’re alive. They can’t block a sale, use the house as collateral, or stop you from giving the property away. You hold full title and can treat the property exactly as if the deed didn’t exist.
When you die, title passes to the beneficiary by operation of law, outside your probate estate. That transfer overrides anything your will says about the same property. Because it happens automatically, there are no court filings, no executor appointment, and no statutory waiting period. The beneficiary records a certified copy of your death certificate with the county recorder to update the chain of title, and some jurisdictions also want a short affidavit confirming the transfer.
One point catches people off guard. Creditors of the deceased owner can still reach property passed by this kind of deed. If the probate estate doesn’t have enough to cover debts, funeral costs, and any statutory allowances owed to a surviving spouse or children, the property can be pulled in to make up the shortfall. States following the Uniform Real Property Transfer on Death Act generally give creditors up to one year after death to bring these claims, though some states allow up to two. The beneficiary’s own creditors have no claim until title actually transfers.
Where These Deeds Are Available
Not every state recognizes them. Roughly 34 states plus the District of Columbia allow some version, sometimes under a different name. Arizona calls it a “beneficiary deed.” Ohio uses a “transfer on death designation affidavit” that functions the same way. A handful of states offer a related tool called an enhanced life estate deed, sometimes known as a Lady Bird deed, which gets to a similar probate-avoidance result through different legal machinery. If your state doesn’t authorize any of these, a revocable living trust is the main alternative for keeping real property out of probate.
What Goes on the Deed
Drafting requires a few specific pieces of information. Get any of them wrong and the county recorder may reject the filing, or the deed may be challenged after you die when it’s too late to fix.
- Full legal names for you and every beneficiary. Nicknames invite title disputes later.
- The legal property description, not the street address. This is the formal description from your current deed, usually lot and block or metes and bounds. You can pull it from your existing deed or the county assessor’s records. A deed that identifies property only by street address will often be rejected or deemed invalid.
- Contingent beneficiaries. Naming a backup protects against the situation where your primary beneficiary dies before you do. If no named beneficiary survives you and no alternate is listed, the property falls back into your probate estate.
- The tax parcel number or assessor’s identification number, which many recording offices require on the form.
Naming More Than One Beneficiary
You can name multiple beneficiaries, but say how they should hold title. The two common choices are joint tenants with right of survivorship, meaning if one later dies the others automatically take that share, and tenants in common, meaning each owns a separate share they can leave to their own heirs. If you don’t specify, the default varies by state and can produce a result you didn’t intend. Spell it out on the deed.
If you’re married, pay attention to your state’s rules on spousal property rights. In community property states and some common law states, a spouse may have rights that override a transfer on death deed naming someone else. And if you co-own as joint tenants with right of survivorship, that survivorship right takes priority: when you die, your co-owner takes the whole property regardless of what your deed says, because your share vanishes at death rather than passing to a named beneficiary.
Signing and Recording
The deed isn’t valid until it’s signed, notarized, and recorded with the county recorder or registrar of titles where the property sits. Every state requires notarization. A few, including California, also require witnesses. Check local requirements before signing.
Recording fees generally run between $15 and $100 for a standard-length document. The critical rule: the deed must be recorded while you’re alive. One found in a drawer after death is worthless in most states. Once recorded, the county stamps the document and assigns a recording number, creating a public record that puts title companies and future buyers on notice.
How to Change or Revoke It
Changing your mind is straightforward, but you have to follow the formalities. Three ways work:
- Record a formal revocation document with the same county office. It must be notarized and recorded before you die, or it has no effect.
- Record a new transfer on death deed naming a different beneficiary. The new deed supersedes the old one for the same property, and it also must be recorded before death.
- Sell or otherwise convey the property during your lifetime. The deed can only affect property you own at death, so transferring it out eliminates the deed’s reach. Some states give a grace period, often 120 days after death, for a lifetime transfer document to be recorded; miss that window and the old deed could still take effect.
Telling the beneficiary you’ve changed your mind does nothing. Tearing up your copy does nothing. The public record controls, and only a new recorded document overrides it.
What the Beneficiary Does After You Die
The paperwork is minimal compared to probate. At a minimum, the beneficiary records a certified copy of your death certificate with the same county recorder where the deed was filed. Some states also want a brief affidavit of death or similar document confirming the beneficiary’s identity. Once recorded, the beneficiary holds clear title and can sell, refinance, or move in.
The one complication is the creditor claim window described above. During that period, a title company may flag the property or require extra documentation before insuring a sale. The beneficiary isn’t personally liable for your debts, but the property itself can be encumbered until the claim period expires.
What the Beneficiary Actually Inherits
The Mortgage Comes Along
A transfer on death deed does not trigger a mortgage’s due-on-sale clause. Federal law prohibits lenders from accelerating a residential mortgage, on properties with fewer than five units, when the 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 That protection applies regardless of whether the property passes through a will, intestate succession, or this kind of deed.
The loan itself doesn’t disappear. The beneficiary takes the property subject to the existing mortgage and has to keep making payments or refinance in their own name. If they can’t qualify to refinance and can’t keep up, the lender can still foreclose. The deed transfers ownership, not financial obligation.
Stepped-Up Tax Basis
One of the biggest tax advantages of inheriting property this way is the stepped-up basis. Under federal law, when you acquire property from someone who died, your tax basis resets to the property’s fair market value on the date of death.2Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent If parents bought a house for $80,000 and it’s worth $350,000 when they die, the beneficiary’s basis is $350,000. A sale the next month at $350,000 produces zero capital gains tax. The benefit applies equally whether the property passes through probate, a trust, or a transfer on death deed.
Estate, Gift, and Property Tax
Recording the deed during your lifetime is not a taxable gift, because the beneficiary gets nothing until you die and you can revoke the deed at any time. At death, the property’s value counts toward your gross estate for federal estate tax. For 2026, the federal estate tax exemption is $15 million per individual, so the vast majority of estates owe nothing.3Internal Revenue Service. Whats New – Estate and Gift Tax Several states impose their own estate or inheritance taxes with much lower thresholds, so a property could still trigger a state-level tax.
Whether the county reassesses property value at death depends on state and local law. Some jurisdictions reassess inherited property to current market value, which can mean a sharp property tax increase. Others limit or exempt reassessment when property passes to a spouse, child, or other close relative. The reassessment rules are the same regardless of how the property passes.
When a Living Trust Fits Better
A transfer on death deed works well for straightforward situations: one property, adult beneficiaries, and a goal of cheap probate avoidance. A revocable living trust is often the better tool in these scenarios, despite its higher setup cost:
- A minor beneficiary. The deed transfers property outright, and if the recipient is a child, a court-appointed guardian may need to manage it until adulthood. A trust lets you name a trustee and set an age for full control.
- Real estate in more than one state. The deed only covers property in the state where it’s recorded, so three states means three separate deeds under three sets of rules. A single trust can hold property across states.
- Incapacity planning. The deed does nothing while you’re alive. If you become incapacitated, your family may need a court-appointed conservator to manage the property. A trust with a successor trustee handles that without court involvement.
- Conditions on inheritance, staggered distributions, or protection from a beneficiary’s creditors. A trust offers flexibility the deed can’t match.
For modest estates with adult heirs and property in one state, a transfer on death deed does the same probate-avoidance job as a trust at a fraction of the cost. The right choice depends on how complicated your situation actually is.