How It’s Going: The Rise of the “Transfer on Death Deed”

Homeowners looking to pass property to the next generation are increasingly asking about transfer on death deeds. These deeds aren’t new. But they are a relatively new option in a number of states. Many people only know about them when their state lawmakers decide to introduce them.

Today, more than 30 states allow for a transfer on death (TOD) deed option. With Deeds.com, you can easily check to see if the transfer on death deed is available in the county where your home is.

If this option is now available where you live, you might wonder what people think about it. Here’s the latest buzz.

Why the Transfer on Death Deed Is Catching On

The TOD deed, also called a beneficiary deed, lets a deed holder make plans to transfer real estate after death. Like any other deed, it must contain the essential elements of a real estate transfer. The homeowner names a beneficiary, fills in the form, has it notarized, and files it with the local recorder of deeds.

Here’s the key difference. The TOD deed specifies that the transfer occurs only upon the owner’s death.

It’s a lot like the way we can designate a beneficiary for a financial account. It’s relatively easy to use. 

Here are further reasons people use TOD deeds:

• They avoid probate, but they still pass the deed along to a beneficiary, making the heir status legal and clear.

• TOD deeds can make a home fraud-resistant. This is because they require notarization and a public recording. 

• There is no need to pass on an interest now; the TOD isn’t effective until the deed holder passes on.

• Unlike joint ownership (which also passes property along at death), a transfer on death deed can be revoked during the deed holder’s lifetime. Or an owner can simply sell their property and include language on the new deed revoking the transfer on death.

• TOD deeds let homeowners stay fully in control of their property while they live.

Some owners use the TOD for tax reasons. Adding someone to a deed by using a quitclaim can create tax obligations for the new owner later on, but a TOD deed can avert capital gains issues.

In states that don’t allow TOD deeds, some people create life estates to (a) stay in the home, and (b) say who gets the deed next. But a life estate passes an ownership interest once it’s recorded. It’s not revocable.  

Is Maryland About to Take the TOD Plunge?

This year, Maryland lawmakers introduced Senate Bill 651 to create transfer on death deeds for real estate. A companion bill in the House, H.B. 738, was also introduced. Now, the bill awaits the governor’s signature. The new law is slated to become effective on October 1, 2026.

Under this bill, a named beneficiary would automatically receive a deed upon the owner’s death.

AARP Maryland supports the new provision. Why? Because it’s a simple and inexpensive estate planning option for many deed holders who don’t feel able to use more complex legal methods. And the deed will still pass effectively to the party chosen by the homeowner.

The Retiree Advocates at AARP Delaware Like TOD Deeds, Too

The transfer on death deed is now available in Delaware. The retirement-focused group AARP is in complete support. AARP says: “Getting your affairs in order is one of the best things you can do for your family.” AARP warns against allowing “tangled titles” to occur because a former owner never wrote a will.

If a deed holder leaves no will, someone might be living in the late owner’s home without being named on the deed. This can tie the resident’s hands. Financing, insurance, and even the ability to sell the home may be out of reach for this heir. And if heirs are arguing over keeping or transferring the deed, the tangle can become even worse. A partition action, which asks a court to separate the heirs’ rights, can break up family relationships. If a TOD deed can prevent all that, it’s a welcome option.

With TOD deeds, Delawareans now have a relatively easy way to stop the tangles before they start. Assuming the late owner wasn’t living with overwhelming debt, the ownership will pass without the need for probate. (And if there is a will, the TOD deed will override it, so probate won’t be needed to pass the deed.) 

TOD deeds can be used by solo deed holders or multiple co-owners. Find out how a couple can use a transfer on death deed.

Before You Go: Words to the Wise

An attorney can tell you what transfer methods are available in your state and how to compare them in your own circumstances. Due diligence includes sitting down with an estate planning attorney in the state where the home is, and where you’ll file the TOD deed. You’ll want to:

• Gain an understanding of your local laws and rules. Take the time to look up your state’s Transfer on Death Act for real estate.

• Remember to research the limitations of transfer on death deeds.

• Check and tell your beneficiary about the time limit to file an affidavit and supporting documents in the months after you pass away.

• Be sure your named beneficiary is prepared to take on any loans, credit lines, or other agreements that remain on your home when you pass. There is a period of time after your death (for example, two years) during which creditors can make claims against your estate.

• Be sure your named beneficiary will know to record an affidavit of death when you have passed, in order to claim your deed.

Your properly completed and recorded transfer on death deed effectively passes your home’s title to your named beneficiary. Some title companies will insure your beneficiary’s title promptly upon your death. Others may have a waiting period. 

Important note: This article provides orientation to the TOD deed. It is not financial or legal advice. Readers should consult attorneys to best navigate their particular circumstances. A professional accountant can offer personalized tax planning help.