A transfer on death deed works by letting you name someone to inherit a specific piece of real estate automatically when you die, without probate. You sign the deed, have it notarized, and record it with the county while you’re alive. Ownership doesn’t move until your death, so you keep the right to sell the property, refinance it, or cancel the deed at any time. When you die, your beneficiary files a death certificate and a short affidavit with the same county recorder, and title passes to them.
More than 30 states and the District of Columbia authorize these deeds. Whether you can use one depends on the state where the property sits, not where you live. A few states use a slightly different instrument, such as Ohio’s transfer-on-death designation affidavit, that works the same way in practice. If your state doesn’t recognize any version of the tool, you’ll need a different probate-avoidance approach, such as a living trust.
What the Deed Does While You’re Alive
Nothing changes about your ownership when you record a TOD deed. You still hold title. You can live in the property, rent it out, take out a new mortgage, sell it, or tear the deed up and start over. The beneficiary has no legal interest until you die, which means they can’t stop you from doing any of those things and can’t be reached by their own creditors through the property.
That revocability matters for taxes too. Because the transfer isn’t complete until death, recording the deed is not a taxable gift. You don’t file a gift tax return, and the deed doesn’t count against your lifetime gift tax exemption.
Setting One Up
To create a valid TOD deed, you need the same mental capacity required to make a will: you understand what you own, who your beneficiary is, and what the deed does.
The deed itself must contain, at a minimum:
- Your full legal name and mailing address as the current owner.
- The beneficiary’s full legal name and mailing address. You can name more than one and specify how they’ll share ownership.
- The legal description of the property. A street address alone isn’t enough. Use the formal description from your current deed or county tax records: lot and block, subdivision, or metes and bounds.
- Language stating the transfer happens at your death. That’s what distinguishes a TOD deed from a regular deed that transfers ownership immediately.
Many states publish standardized forms through the county recorder, a court clerk, or a state-sanctioned legal forms site. Using the correct form for your state helps the document survive the recording process.
Signing, Notarizing, and Recording
Sign the deed in front of a notary public. The notary verifies your identity and applies a seal that makes the document eligible for public recording. Some states also require one or two witnesses on top of notarization.
Then submit the notarized original to the county recorder or registrar of deeds in the county where the property sits. Recording fees run from roughly $10 to over $100 depending on the state and page count. The office stamps and returns a copy as your confirmation.
Recording before death is not optional. A TOD deed that is signed and notarized but never filed has no legal effect. The property would pass under your will or, if you have no will, under your state’s intestacy laws, and both routes require probate.
What Happens When You Die
Title doesn’t jump to your beneficiary the moment you die. They have to update the public record. The usual steps:
- Get a certified death certificate from the local vital records office or health department.
- Prepare an affidavit of death, notice of death, or similar sworn statement confirming the owner has passed. Most counties require one.
- Record both documents with the same county recorder that holds the original TOD deed.
Once processed, the record shows the beneficiary as the new owner, and they can occupy, manage, or sell the property. Delays create problems with property taxes, insurance, and any attempt to sell or refinance, so filing promptly matters.
Changing or Canceling the Deed
You can revoke or replace a TOD deed at any time while you’re alive. Two ways to do it:
- Record a revocation form. Most states publish a specific one. Sign it, notarize it, and file it with the county recorder, just like the original deed.
- Record a new TOD deed for the same property. The most recently recorded deed controls, so a new one automatically replaces the earlier version.
A will cannot override a recorded TOD deed. If your will names a different person to receive the property, the recorded deed still wins. The only way to change the beneficiary is at the county level, through a new deed or a formal revocation.
If you divorce, many states automatically revoke a designation naming a former spouse, but not all do, and the details vary. The safer move is to record a new deed or a revocation yourself rather than trust the automatic rule to reach your situation.
When a TOD Deed Won’t Do What You Expect
Joint tenancy takes priority. If you own the property as joint tenants with right of survivorship, the surviving joint tenant gets your share automatically at your death regardless of what your TOD deed says. The deed only works for the share you have the legal right to transfer alone. Sole owners and tenants in common don’t run into this conflict.
If your beneficiary dies before you, the deed typically lapses and the property falls back into probate under your will or state intestacy law. You can head this off by naming one or more alternate beneficiaries on the deed. If the form doesn’t have space for alternates, update the deed whenever a beneficiary dies.
Mortgages, Liens, and the Due-on-Sale Question
A TOD deed passes the property subject to any mortgages, liens, or debts attached to it. The deed does not erase what you owe. If a mortgage balance remains at your death, your beneficiary inherits both the property and the obligation to keep up payments or pay off the loan.
Lenders often include due-on-sale clauses that let them demand full repayment when a property changes hands. Federal law generally blocks that in this situation. The Garn-St. Germain Depository Institutions Act prohibits lenders from enforcing a due-on-sale clause when a borrower’s property transfers to a relative on death, for residential properties with fewer than five units.1Office of the Law Revision Counsel. 12 U.S. Code 1701j-3 – Preemption of Due-on-Sale Prohibitions If the beneficiary is not a relative, that federal protection may not apply and the lender could call the loan due.
Taxes for You and the Beneficiary
Property that passes through a TOD deed receives a stepped-up basis. The beneficiary’s tax basis is the fair market value on the date of your death, not what you originally paid.2Office of the Law Revision Counsel. 26 U.S. Code 1014 – Basis of Property Acquired From a Decedent If you bought a house for $150,000 and it’s worth $400,000 when you die, your beneficiary’s basis is $400,000. A sale at $400,000 produces no capital gains tax.
The property still counts in your taxable estate at fair market value. The federal estate tax exemption for 2026 is $15,000,000 per person, so this affects very few estates.3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
A homestead exemption or similar property tax reduction doesn’t ride along with the deed. Those benefits go to the individual who applies and qualifies. Your beneficiary should contact the county assessor after the transfer to see whether they qualify on their own and, if so, apply.
Medicaid Eligibility and Estate Recovery
Because a TOD deed is revocable and no transfer actually happens until death, recording one is generally not treated as a disqualifying asset transfer under Medicaid’s five-year look-back. It typically won’t trigger a penalty period on your benefits.
After death is a different question. States can seek reimbursement for Medicaid costs paid on your behalf, and whether they can reach TOD property depends on how each state defines “estate” for recovery. Some states limit recovery to probate assets, which can shield the property. Others define the recoverable estate more broadly to include non-probate transfers, which exposes it. If Medicaid recovery is a real concern in your situation, an elder law attorney licensed in your state can tell you where the line falls.