Own Luxury Homes®
Transfer-on-Death Deed Explained
TOD deed (30+ states): property passes to named beneficiary at death without probate. Owner retains full control + can revoke anytime. Heir gets stepped-up basis (same as inheritance). No present transfer — no loss of control, no gift tax. Medicaid: some states count TOD in lookback — verify with elder law attorney. Own Luxury Homes® 12-Point Agent Integrity Audit™ — TOD-held property sales handled efficiently.
Transfer-on-Death Deed: How It Works, Where It’s Available, and When to Use It
A Transfer-on-Death (TOD) deed — also called a beneficiary deed, revocable transfer-on-death deed, or TODD — is a simple and inexpensive estate planning tool that allows a homeowner to name a beneficiary who automatically receives the property at death, bypassing probate, without any current transfer of ownership. It is available in 30+ states and is the simplest probate-avoidance tool for single-property owners.
How a TOD Deed Works
| Feature | Detail | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Who can use it | Any property owner in a state that recognizes TOD deeds (30+ states as of 2026) | ||||||||
| What it does | Names a beneficiary who receives the property automatically at death; no probate required | ||||||||
| Effect during lifetime | None — owner retains full ownership, control, and can sell, mortgage, or revoke | ||||||||
| Effect at death | Property transfers to beneficiary immediately; beneficiary records affidavit of survivorship + death certificate | ||||||||
| Stepped-up basis | Yes — beneficiary receives FMV at date of death as their new basis | ||||||||
| Can be revoked | Yes — record a revocation or a new TOD deed; most recent deed controls | ||||||||
| Multiple beneficiaries | Most states allow; property transfers in specified shares | ||||||||
| Cost | Typically $100–$500 with an attorney; much less than a living trust | ||||||||
| A TOD deed is revocable and has no effect during the owner's lifetime. The beneficiary has no rights to the property until the owner dies. This makes it safe to use without fear of losing control. | |||||||||
States That Allow TOD Deeds (as of 2026)
Available in: Alaska, Arizona, Arkansas, California, Colorado, Hawaii, Illinois, Indiana, Kansas, Maine, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, South Dakota, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and others. NOT available in all states — verify your state before planning around a TOD deed. New York and Florida do not currently recognize TOD deeds for real property.
TOD Deed vs Living Trust: Which to Choose
| Factor | TOD Deed | Living Trust | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Cost | $100–$500 | $1,500–$5,000+ | |||||||
| Complexity | Simple — one document | Moderate — trust creation + deed re-titling | |||||||
| Multi-property | Separate deed for each property | One trust handles all assets | |||||||
| Out-of-state property | Separate TOD deed per state (where allowed) | One trust handles multi-state | |||||||
| Contested? | Easier to contest | More robust and harder to challenge | |||||||
| Incapacity planning | Does not help; trust provides trustee for incapacity | Successor trustee can manage during incapacity | |||||||
| A TOD deed is ideal for a single-property homeowner in a state where it's available who wants simple, cheap probate avoidance. A living trust is better for complex estates, multi-state property, or incapacity planning. | |||||||||
What Happens When You Sell a Home With a TOD Deed
During your lifetime, the TOD deed has no effect on the sale. You sell the home exactly as you would any property. At closing, the TOD deed is effectively extinguished — the buyer receives clear title and the beneficiary designation no longer applies to that property. If you want the sale proceeds to go to the same beneficiary, update your estate plan accordingly.
“The TOD deed is the most underused probate-avoidance tool I know of. For a single-property owner in a state that allows it, it costs $100–$500 and eliminates probate entirely for that property. The only catch is remembering to revoke it if you sell the property or change your beneficiary. A simple, powerful tool for the right situation.”
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes®
What is a Transfer-on-Death deed?
A legal document that names a beneficiary who automatically receives your property at death, bypassing probate, with no current transfer of ownership. You retain full control during your lifetime and can revoke or change it anytime. The beneficiary receives the stepped-up basis at your death. Available in 30+ states.
Does a TOD deed avoid capital gains tax?
A TOD deed does not avoid capital gains tax during your lifetime. The beneficiary receives the stepped-up basis at your death — the same as inheriting through a will or trust. Capital gains on the deceased’s lifetime appreciation are erased.
Can I sell my house if it has a TOD deed?
Yes. The TOD deed has no effect on your ability to sell during your lifetime. When you sell, the TOD designation is extinguished — the buyer receives clear title. Update your estate plan if you want the sale proceeds to go to the same beneficiary.
Is a TOD deed the same as a living trust?
No. A TOD deed is a simpler, cheaper tool that names one beneficiary for one property. A living trust handles all assets, provides incapacity planning, and is more robust for complex estates or multi-state property. TOD deed: $100–$500; living trust: $1,500–$5,000+.
Own Luxury Homes® — estate and retirement real estate specialists experienced with TOD-held property sales. 12-Point Agent Integrity Audit™. Talk to an estate specialist ›
"The introduction Own Luxury Homes® makes is to a specialist with documented closing history in your specific market — not the county, not the metro, the submarket you're actually selling or buying in. That's the standard we verify before your name goes anywhere."
— Ryan Brown, Principal Broker & CEO, Own Luxury Homes® (FL License BK3626873)