What a Transfer on Death Deed Does
A transfer on death deed (TOD deed) names who inherits your home, and takes effect only when you die. Until then nothing changes: you still own the property outright, you can sell it, mortgage it, or revoke the deed entirely, and the person you named has no legal interest in it and no say in what you do.
When you die, the home passes directly to that person without going through probate. That is the whole appeal. Probate can take months, costs money, and is a public court process. A TOD deed skips it for the single asset that usually matters most.
You'll see the same tool under different names depending on the state: Missouri, Arizona, Arkansas and Colorado call it a beneficiary deed; Ohio uses a transfer on death designation affidavit. The mechanics are essentially the same.
Where They're Allowed
About 32 states plus the District of Columbia now authorize some form of TOD deed. The list has grown steadily — New York and Georgia joined in 2024, Delaware in 2025 — so a guide written a few years ago may well be out of date for your state.
States that allow them include Alaska, Arizona, Arkansas, California, Colorado, Delaware, DC, Georgia, Hawaii, Illinois, Indiana, Kansas, Maine, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming.
Because these lists change and the details vary, confirm your own state with a local attorney or your county recorder before relying on anything you read online, including this page.
The Lady Bird Deed Alternative
Florida has no TOD deed statute. What it uses instead is an enhanced life estate deed, universally known as a "Lady Bird deed," which achieves much the same result: you keep full control and the right to sell during your life, and whoever you named takes the property at death without probate.
Lady Bird deeds are recognized in a short list of states — Florida, Michigan, Texas, Vermont and West Virginia. Texas and West Virginia are unusual in offering both tools, so residents there have a genuine choice to discuss with a lawyer. In Florida, Michigan and Vermont the Lady Bird deed rests on case law and title practice rather than a dedicated statute, which is exactly why you want a local attorney drafting it.
How One Gets Made
- Use your state's specific form and language. These deeds are creatures of state statute and the wording matters. A generic form downloaded from the internet is the most common way people end up with an invalid deed.
- Name beneficiaries precisely, and name a contingent beneficiary (see the risks below).
- Sign and notarize according to your state's requirements.
- Record it with the county before you die. This is the step that trips people up: an unrecorded TOD deed is generally worthless no matter how properly it was drafted. Record it as soon as it's signed.
- After the death, the beneficiary typically records an affidavit of death and a death certificate to complete the transfer.
Cost is usually modest — attorney drafting plus a county recording fee — which is what makes it attractive compared with setting up a trust.
The Four Risks People Miss
TOD deeds get promoted as a simple probate shortcut. They often are. But four problems come up repeatedly:
1. It doesn't wipe out debts
Your beneficiary inherits the property subject to the mortgage, liens and creditor claims. Avoiding probate is not avoiding debt. In practice, creditors may have many months to bring claims, and title companies are often reluctant to insure a recently TOD-transferred property until that window closes — which can delay a sale precisely when your heirs want to sell.
2. It may not protect the house from Medicaid recovery
This is the most misunderstood point. A TOD deed avoids probate, and in some states Medicaid estate recovery is limited to probate assets, so it helps. But several states pursue "expanded recovery" that reaches non-probate transfers too, and some place liens on property before death. Whether a TOD deed shields your home from Medicaid recovery is genuinely state-specific and is a question for an elder law attorney, not an article.
3. Multiple beneficiaries can deadlock
Leave the house to three children and you have created co-owners who must agree on whether to sell, who pays the taxes and insurance meanwhile, and what to do if one wants to move in. The deed provides no mechanism for resolving that. Families that would have handled it fine under a will with a named executor sometimes end up in court instead.
4. No backup if your beneficiary dies first
If the person you named predeceases you and you named no contingent beneficiary, the deed typically lapses and the house falls back into probate — the exact outcome you were trying to avoid. Always name an alternate, and revisit the deed after any death in the family.
TOD Deed, Will, or Trust?
| Tool | Avoids probate? | Best for |
|---|---|---|
| TOD deed | Yes, for that property | A single home going to one clear beneficiary, on a modest budget |
| Will | No | Naming an executor, handling debts and multiple assets, complex family situations |
| Revocable living trust | Yes, for everything in it | Multiple properties or states, incapacity planning, staged distributions, conflict-prone families |
A TOD deed is not a substitute for a will — it handles one asset and nothing else. Most people who use one still need a will.
What About Taxes?
Two pieces of good news. First, a TOD deed is not a gift during your lifetime, so there's no gift tax reporting when you sign it. Second, because the transfer happens at death, your beneficiary receives a stepped-up basis — the property's value is reset to its market value on the date of death, which can eliminate an enormous capital gains bill. That's a decisive advantage over simply deeding the house to your children now, which we cover in quitclaim deed vs. transfer on death deed.
On the property tax side, expect the inheritance to be a change of ownership that can trigger reassessment, depending on the state; see property taxes on an inherited house.
Bottom Line
If you own a home in one of the roughly 32 states that allow them, a TOD deed is a cheap and effective way to keep your house out of probate while giving up no control at all during your life. Name a contingent beneficiary, record it immediately, and get a local attorney to draft it using your state's language. And if Medicaid recovery, significant debts, or several squabbling heirs are part of your picture, talk to an estate planning attorney before assuming a one-page deed solves it.
This is general information, not legal advice. Property and estate law varies by state and changes frequently — consult an attorney licensed where your property is located.