If you own a house or other real estate, you might be able to take advantage of a transfer-on-death (TOD) deed—also commonly referred to as a beneficiary deed—to leave your real estate property to someone after you die. More than half of the states in the U.S. currently allow this type of deed, and more states are jumping on board. Because these deeds avoid probate and tend to be easy to create, they offer an attractive option to homeowners who want to name someone to inherit their home.
What Is a Transfer-on-Death (TOD) or Beneficiary Deed? How Does It Work?
A transfer-on-death or beneficiary deed, like any real estate deed, is a document that names a new owner to receive the property. The deed describes the specific property that will be transferred. However, unlike other deeds, the TOD or beneficiary deed doesn't become effective until you die. Because of this, you still own your home during your lifetime, even after you make a TOD deed. (And if you were wondering about the tax implications of a transfer-on-death deed, yes, you'll still need to pay property taxes while you're alive.)
How Do TOD or Beneficiary Deeds Avoid Probate?
The main benefit of using a transfer-on-death or beneficiary deed—rather than, say, using a will to leave your house to someone—is that a TOD or beneficiary deed keeps your house out of probate. For many people, their houses are their largest assets, and keeping their houses out of probate can mean saving a significant amount of money, not to mention a faster, smoother process of passing the house on to the person they want to have it. Additionally, depending on what other assets you own, using a TOD deed might help you skip the probate process altogether—not just with your home, but with your other assets as well; without your home factored into your probate assets, you might slide in under the threshold amount that triggers the probate process in the first place.
Note that TOD deeds don't help you avoid estate taxes, another area of concern for some. Only the very richest people need to worry about federal estate taxes, which apply to estates over $15 million for deaths in 2026 (or double that for couples).
Some states also impose separate estate taxes starting at lower thresholds. If you're worried about estate taxes, you should consult an estate planning lawyer. (See What Can an Estate Planning Attorney Do for You?)
Can You Use a TOD Deed for Co-Owned Property?
If you co-own property, you can still make a TOD deed. But whether you make the deed alone (for your share of the property) or together with your co-owners (for the entire property) will depend on your state's particular laws. For example, in California, even if you own the property jointly with another person, only one owner can sign a TOD deed. So you'll each have to make your own TOD deed if you all want to name beneficiaries for the property. In many other states, whether you make your deed by yourself or with your co-owner will depend on exactly how you own the property—with the "right of survivorship" (for example, as joint tenants or tenants by the entirety) or without the right of survivorship (for example, as tenants-in-common). If you own it with the right of survivorship, the property will always go to the surviving co-owner(s) before any applicable TOD deeds come into play.
Are There Any Disadvantages to Using a TOD Deed?
While there are few outright disadvantages to using a TOD deed, certain situations (like joint ownership, mentioned above, or naming a minor child as a beneficiary) can get rather complex, and it's best to do your research. Both living trusts and TOD deeds avoid probate, and in some circumstances, placing your home in a trust will be a better choice. These circumstances might include, for example:
- You own significant property (apart from a home) that you want to keep out of probate
- You want to name someone to manage your property and home in the event that you're incapacitated
If you already have a living trust, there's usually no need to make a TOD deed as well. If you've acquired real estate after creating your trust, just make sure to own the real estate in your trust. This is usually done by owning the property in your name as "trustee" of the trust, rather than in your capacity as an individual.
How Do You Make a TOD or Beneficiary Deed?
The nitty-gritty of creating a transfer-on-death or beneficiary deed depends upon the state and county where the property is located, but usually includes these steps:
- creating the deed,
- signing the document and getting it notarized, and
- filing (officially referred to as “recording”) the completed document with the county land records office.
First, check if your state allows TOD or beneficiary deeds. Then research whether your state also offers a handy form with blanks you can fill in. These forms, called “statutory forms,” essentially provide a template for creating a TOD deed that's valid under your state’s specific laws. However, statutory forms can sometimes be riddled with legalese, and it's not always apparent how to fill them out. For a more user-friendly experience, try a software program like WillMaker & Trust, which takes the guesswork out by leading you through a guided interview.
Hiring a lawyer to help you with the deed is an option as well, and the lawyer’s fees for drafting a simple TOD deed should be lower than fees for creating a will or living trust—two other documents that people commonly use to transfer their home at death.
Once you've created your TOD deed, you'll need to sign it before a notary public, and then file it with the land records office in the county where you own real estate. A handful of states impose additional requirements, such as witnesses or deadlines for filing the deed (such as 30 or 60 days after signing).
How Do You Revoke a TOD or Beneficiary Deed?
A TOD deed is revocable, meaning that you can change your mind and cancel it. You can usually revoke a previously filed TOD deed by:
- Filing a revocation form with the same land records office in the county where you originally filed the TOD deed (again, some states offer statutory forms you can use for this specific purpose)
- Filing a new TOD deed that either states it revokes the previous deed or is simply inconsistent with the previous deed, or
- Filing a new (non-TOD) deed that states it revokes the previous TOD deed.
Notably, you can't revoke a TOD deed by leaving the property to someone else in your will. (The TOD deed will take priority.) If you sell your home or otherwise give it away during your lifetime, your TOD deed will also no longer be effective, since you no longer have ownership or the ability to give the home to someone else.