For most retirees, the family home is the largest single asset they own. It is also one of the hardest assets to pass without going through probate — unless a specific legal tool is used. A Transfer-on-Death deed — often called a TOD deed, a beneficiary deed, or in some states a Lady Bird deed — allows a homeowner to name a beneficiary who will inherit the property automatically when the owner dies. No probate. No court. No lawyer required at the time of death. This tool has expanded significantly over the last decade. More than 30 states now recognize some version of it. For retirees in those
The mechanics are straightforward. During the owner's lifetime, they sign a TOD deed that names a beneficiary and records it with the county land records office. The deed must be recorded before the owner dies to be valid. During the owner's lifetime, the TOD deed changes nothing. The owner continues to live in the home, pay the mortgage, take out a home equity line if they choose, or sell the property entirely. The named beneficiary has no legal interest in the property while the owner is alive — no claim on it, no right to use it, no ability to block a sale. When the owner dies, the beneficiary records the death certificate with the county. The property transfers to them automatically, outside of probate. No court proceeding. No waiting period while probate runs its course. No attorney fees calculated as a percentage of the property's gross value. The deed is also fully revocable during the owner's lifetime. Changing the beneficiary — or canceling the deed entirely — requires recording a new document with the county. It does not require the beneficiary's permission. A TOD deed conveys no present interest. The named beneficiary has no claim on the property, no right to occupy it, and no ability to interfere with the owner's decisions while the owner is alive. The transfer happens only at death, and only if the deed is still in place.
State availability varies. As of 2025, more than 30 states recognize some form of TOD deed or equivalent instrument.
Mechanism States TOD Deed / AK, AZ, AR, CA, CO, DE, DC, GA, HI, IL, IN, KS, ME, Beneficiary Deed MN, MS, MO, MT, NE, NV, NM, NY, ND, OK, OR, SD, TX, UT, VA, WA, WI, WY Lady Bird Deed FL, MI, TX, VT, WV (Enhanced Life Estate) Transfer on Death Ohio (exclusive mechanism since 2009) Affidavit (replaces TOD deed) No TOD deed Remaining states — alternative: living trust or recognized joint tenancy Source: Nolo.com — Which States Allow TOD Deeds; Maryland General Assembly; Ohio Legal Help; ssandplaw.com Ohio is a notable case. The state eliminated its TOD deed in 2009 and replaced it with the Transfer on Death Designation Affidavit — a specific affidavit format that must include a legal description of the property, the owner's marital status, and the recording information from the original deed. It serves the same function as a TOD deed but must follow the required format precisely to be valid. Florida and Michigan offer the Lady Bird deed — formally called an enhanced life estate deed. It functions similarly to a standard TOD deed but includes an explicit reserved right for the owner to sell, mortgage, or otherwise deal with the property during their lifetime without the beneficiary's involvement. In Florida, the Lady Bird deed also interacts favorably with Medicaid estate recovery rules compared to a standard TOD deed.
One of the most important tax benefits of the TOD deed is that it preserves the step-up in basis for the inherited property. When an asset is inherited — rather than gifted during the owner's lifetime — its cost basis for tax purposes is reset to the fair market value at the date of death. For real estate that has appreciated significantly, this can eliminate a large capital gains tax liability. If a parent bought a home for $150,000 in 1995 and it is worth $750,000 at the time of death, the heir who inherits through a TOD deed receives it with a cost basis of $750,000. If the heir sells it promptly for $750,000, there is no taxable gain. If the same parent had added the child to the deed as a joint owner during their lifetime as a probate-avoidance strategy, the child would receive only the parent's share of the original basis — resulting in a significantly larger capital gains tax bill upon sale. The TOD deed preserves the full step-up.
An estate planning attorney can confirm whether a TOD deed is
Nolo.com — Which States Allow TOD Deeds; Maryland General