Transfer-on-death deeds: passing your home without probate

For most families, the house is the single biggest reason an estate ends up in probate. A transfer-on-death (TOD) deed, also called a beneficiary deed in some states, is the low-cost fix: you record a deed naming who inherits the property at your death, keep full ownership and control while alive, and the home passes to your named beneficiary outside probate when you die. For a homeowner whose main probate asset is the house, it can deliver much of a living trust's benefit for the price of recording one document.

How it works

You sign and record a TOD deed with your county recorder, naming a beneficiary. Nothing changes during your lifetime: you still own the home outright, can sell it, mortgage it, rent it, or revoke the deed entirely, and the beneficiary has no rights and no access until you die. At death, your beneficiary records your death certificate and a short affidavit, and title passes to them directly. No probate case, no court, usually just a couple of filings and a few weeks.

• Cost to set up: often under $100 in recording fees, or a few hundred if an attorney prepares the deed.
• Control: complete while you are alive, you can revoke or change it anytime.
• Revocability: unlike adding someone to your deed now, a TOD deed gives the beneficiary nothing until death.
• Step-up preserved: because the beneficiary inherits at death rather than receiving a lifetime gift, they get the full stepped-up basis.

Which states allow it

Roughly 30 states plus the District of Columbia authorize TOD or beneficiary deeds, and the list has grown over time, but it is not universal, some large states still do not permit them, and each state has its own form and rules. Because availability and the exact procedure are state-specific, confirm your state offers a TOD deed and use its official form (or have an attorney prepare it) before assuming this route is open to you.

How to set one up

1. Confirm your state allows TOD or beneficiary deeds and locate its official form.
2. Name a primary beneficiary and, importantly, an alternate in case the primary predeceases you.
3. Sign and notarize the deed as your state requires, then record it with the county recorder while you are alive, an unrecorded TOD deed is generally ineffective.
4. Keep a copy with your estate documents and note it on your master list of designations.
5. Revisit it after any major change, marriage, divorce, a beneficiary's death, or selling the home.

The bottom line

A transfer-on-death deed is one of the best-value tools in estate planning where it is available: it keeps your home out of probate, preserves your full control while you are alive, and protects the beneficiary's stepped-up basis, all for about the cost of a recording fee. It is not a full plan, it handles contingencies poorly, does nothing for incapacity, and can create co-owner headaches, so coordinate it with a will, a durable power of attorney, and your other beneficiary designations. But for a homeowner whose main probate exposure is the house, recording a TOD deed may be the highest-leverage afternoon in the whole plan. Confirm your state allows it first.