If you've made the decision about who will inherit your property and want to ensure that your wishes are honored, the transfer on death deed is the document you need.

This effective estate planning tool allows the selected property to pass directly to named beneficiaries upon your death. This way, the lengthy and costly probate process can be avoided.

In this article, we'll explore the meaning of a transfer on death deed, how to create one, its benefits, and potential drawbacks. Let's begin!

What is a Transfer on Death Deed, and How Does it Work?

A transfer on death (TOD) deed is a legal document that allows property owners to name a beneficiary who will automatically inherit their real estate when they pass away—without the need for probate. This deed is used for homes, land, or other real estate and is sometimes called a “beneficiary deed” (in certain states).

A transfer on death deed is an efficient estate planning tool since, by signing and recording this deed with your local land records office, you’re setting up a plan for who gets your property when you die. However, until that happens, the deed has no effect—you remain the full owner, free to sell, refinance, or even change your mind about TOD because it is a revocable deed.

For example, let’s say John owns a house and wants his son to inherit it. He creates and records a TOD deed, naming his son as the beneficiary. While John is alive, nothing changes—he still owns the house, pays the bills, and can sell it if he wants. But when John passes away, the house automatically transfers to his son without needing to go through probate court.

As of February 2025, 32 states and the District of Columbia recognize the validity of transfer on death deed. In addition to transfer on death deed, some states, such as Florida and Vermont, recognize lady bird deeds, which also allow the property owner to retain control during their lifetime, but cannot manage the property without the beneficiary’s consent.

Benefits of a Transfer on Death Deed

Using a TOD deed for real estate ownership transfer comes with various benefits. Let’s see what the main ones are:

How to Create a Transfer on Death Deed

To create a transfer on death deed, the first step is to confirm whether your state recognizes it. As of now, more than 30 states, including California, Texas, and Ohio, allow transfer on death deeds under specific circumstances.

For example, Section 5642 of the California Probate Code outlines the legal requirements, stating that the deed must be signed, notarized, and recorded to be valid. In contrast, states like Florida and New York do not recognize transfer on death deeds.

Once you confirm your state’s acceptance, you must draft the deed using either a state form or a custom legal document that includes essential information. You can use a power of attorney to appoint a legal professional who will draft TOD deeds for you.

A TOD deed should include your full name and address, the beneficiary’s details, and a legal property description as recorded in the county’s land records. Additionally, the deed must clearly state that the transfer will occur upon your death while retaining your full ownership rights during your lifetime.

After drafting the transfer on death deed, you must complete the legal document preparation process by signing it in the presence of a notary public to meet notarized deed requirements. Notarization is mandatory in all states that recognize transfer on death deeds, ensuring the document’s authenticity and preventing fraud.

Once notarized, the final step is recording the deed with the county recorder’s office where the property is located. Without proper recording, the deed has no legal effect, and the property may be subject to probate.

Transfer on Death Deed vs. Will vs. Trust

A transfer on death deed, a will, and a trust are all ways to transfer property after death, but they work differently and have unique advantages. As we learned, a TOD deed allows real estate to pass directly to a beneficiary without going through probate.

On the other hand, a will is a legal document that distributes all assets, not just real estate, according to the owner’s wishes. This implies that a will allows for more detailed instructions, such as naming guardians for children, which a TOD deed cannot do.

A trust, such as a revocable living trust, allows the owner to place assets under the control of a trustee. Unlike a will, trust prevents probate and can provide more protection. Still, creating a trust is more complex and costly than a TOD deed or a will.

Here’s a simple comparison:

Potential Cons and Drawbacks of TOD

Although a transfer on death deed is a very useful estate planning tool, it comes with certain drawbacks you should consider.

One issue is credit claims. Since the property stays in the owner’s name until death, any debts tied to it won’t simply go away. If the owner had unpaid loans or taxes, the beneficiary might have to deal with them before fully owning the property.

Also, if you’re wondering whether a transfer on death deed can be contested, the answer is yes—family members and/or creditors can challenge it in court, claiming the owner was pressured, not mentally capable, or the deed was improperly signed. Another concern is multiple beneficiaries. If more than one person is named, disagreements may arise, and beneficiaries might argue about selling or dividing the property.

Lastly, state restrictions matter. Not all states recognize TOD deeds. For example, Florida and New York do not allow them, meaning residents there must use a trust or other legal options. So, before creating a TOD deed, it’s important to check state laws and think about these possible issues.

Explore Alternative Estate Planning Options with Contracts.net

While a transfer on death deed is an effective way to pass property directly to your beneficiaries after your death, you can achieve similar results with other, one-sided documents.

To explore other ways of managing your property after death, check out our Contract.net builder tools and templates, such as the last will and testament templates. They offer easy, reliable options for ensuring your property is transferred according to your wishes.

Final Thoughts

If you already know who should inherit your property, don't leave it as just an idea—make it a reality! A transfer on death deed allows you to secure your wishes by drafting, notarizing, and recording the document.

If legal procedures seem overwhelming, remember that proper estate planning helps prevent future disputes and ensures clarity. By deciding now who will receive what, you provide peace of mind to your loved ones, knowing your property will be distributed exactly as you intended.

Transfer on Death Deed FAQ