A transfer on death deed is a deed the owner signs and records now that names who receives the property at death, gives that person no interest at all while the owner is alive, can be revoked at any time, and passes the property outside probate when it finally takes effect.
It is sometimes called a beneficiary deed, a TOD deed, or, in Nevada, a deed upon death. All of those names describe the same instrument: a recorded document that does nothing until the owner dies and then does one thing, which is move a single piece of real property to a named person without a probate case.
The idea came from payable on death bank accounts. Those have worked for decades: name a beneficiary, keep full control of the money, and the bank pays it out on a death certificate. A transfer on death deed applies that pattern to a house, and about half the states now have a statute allowing it.
What the deed does, and what it does not do
While the owner is alive, the deed is inert. The owner can sell the house, refinance it, rent it out, give it away, or record a second transfer on death deed naming somebody else. The beneficiary has no ownership, no right to be consulted, and nothing a creditor of theirs can attach. Under most state statutes the beneficiary does not even have to be told the deed exists.
At death the deed operates on its own. There is no court case, no personal representative appointed, and no notice period before the property changes hands. The beneficiary records a short affidavit, usually with a certified death certificate and whatever transfer declaration the county wants, and the county recorder's index now shows the beneficiary as owner.
It reaches one asset. It says nothing about bank accounts, cars, the contents of the house, or a second property, so it is not a substitute for a will and most people who use one still have one.
Which states have one
Roughly half the states plus the District of Columbia allow some version, and most of the ones that adopted recently used the Uniform Real Property Transfer on Death Act as the model, which is why the statutes read so much alike. States where the instrument is well established include Texas, California, Ohio, Illinois, Virginia, Washington, Minnesota, Indiana, and Nevada, which calls it a deed upon death.
The list changes, and so do the names: beneficiary deed in Arizona and Missouri, transfer on death instrument in Illinois, deed upon death in Nevada. Read the current statute for the state the property sits in, because the deed is governed by the law where the land is, not by where the owner lives.
Making one, and revoking one
The three requirements are almost universal. The deed has to be signed by the owner, acknowledged before a notary, and recorded with the county recorder for the county where the property is located before the owner dies. Recording after the death does nothing; the deed is simply void. Most statutes also print a suggested form, and using the statutory form is the safest way to satisfy the wording requirements.
The legal description matters more than the street address. A deed that describes the wrong parcel, or describes it loosely, is the most common way one of these fails, and the fix costs far more after a death than before it.
Revocation is by a recorded instrument, not by tearing up a copy. Nearly every statute says a revocatory act on the deed itself, crossing it out or writing void across it, has no effect. The owner records a revocation, or records a new transfer on death deed naming somebody else, or simply sells the property, any of which ends the first deed. A later will usually cannot revoke one, which surprises people and is covered on the problems page.
The mortgage, creditors, and Medicaid
The beneficiary takes the property subject to every lien on it at the moment of death. The mortgage, the home equity line, the tax lien, the judgment lien, the assessment: all of it survives and stays attached to the house. The deed transfers the owner's interest, and the owner's interest was always the property minus what is owed against it.
The federal Garn-St Germain Act, 12 U.S.C. 1701j-3(d), stops a lender calling the loan on a transfer to a relative on the borrower's death. That protects the beneficiary from acceleration. It does not make them the borrower, and it does not stop foreclosure if the payments stop.
Creditors are the part people underestimate. Several states let the estate reach property that passed this way when the probate estate is too small to pay allowed claims, and some require the beneficiary to publish a notice to creditors and wait out a claim period before selling. Medicaid estate recovery is treated the same way in many states, and the statutes commonly say in terms that they do not limit recovery of benefits paid.
Compared with a joint tenancy, a trust, and a will
A joint tenancy with right of survivorship also avoids probate, but it does it by handing the other person an ownership interest today. Their creditors, their divorce and their signature all become part of the picture immediately, and the transfer cannot be undone alone.
A revocable living trust avoids probate and does considerably more: it can hold several properties and other assets, name a successor trustee to act during incapacity, and hold property for a minor or spread distributions over years. It costs more and the property has to actually be deeded into it.
A will does not avoid probate at all; it is the instruction manual for the probate case. In most states a transfer on death deed beats a later will as to that parcel, so the two have to be written to agree.
Questions people ask
Does a transfer on death deed avoid probate?
For that one property, yes, in the states that recognize it and where the deed was recorded before the death. Everything else the owner held still passes by will or by intestacy, so a probate case may still be opened for the rest of the estate.
Can you sell a house that has a transfer on death deed on it?
The owner can sell it any time without the beneficiary's consent or signature. The sale extinguishes the deed, because the deed only ever conveyed whatever interest the owner still held at death, and after a sale that is nothing.
Does a transfer on death deed have to be notarized?
In every state that allows one, yes. The deed has to be acknowledged before a notary and then recorded with the county recorder before the owner's death, and a recorder will reject an unacknowledged deed at the counter.