Question 1

What is a transfer on death deed?

Accepted Answer

A transfer on death (TOD) deed allows a property owner to designate a beneficiary who will receive the property upon the owner’s death, without probate. The TOD deed: is recorded during the owner’s lifetime, takes effect only at the owner’s death (the owner retains full ownership and control during their lifetime), and can be revoked at any time before death. Benefits: avoids probate (the property passes directly to the beneficiary), simple (no need for a trust), and low cost (recording fees only). Limitations: not available in all states; Florida enacted a TOD deed statute effective July 1, 2024 (Section 732.4015).

Question 2

How does a transfer on death deed work?

Accepted Answer

Mechanics: the owner executes and records the TOD deed (naming the beneficiary), the owner retains full ownership during their lifetime (can sell, mortgage, or rent the property), the TOD deed is revocable (the owner can revoke it by recording a revocation), at death: the property passes to the beneficiary automatically (the beneficiary records an affidavit and a certified death certificate), and no probate is required (the transfer occurs outside of probate). The beneficiary: has no rights or interest in the property until the owner’s death.

Question 3

What are the limitations of a transfer on death deed?

Accepted Answer

Limitations: creditors (the property may still be subject to the deceased owner’s debts and claims), Medicaid estate recovery (the state may seek recovery from the property for Medicaid benefits paid), no stepped-up basis issues (the beneficiary receives a stepped-up basis at the owner’s death; but the transfer may trigger other tax consequences), and homestead (in FL: the homestead exemption and restrictions on devise (Section 732.4015) apply to TOD deeds; the surviving spouse and minor children’s homestead rights cannot be defeated by a TOD deed).

Transfer on Death Deed

Transfer on Death Deeds

How It Works

At Death

Limitations

Related Terms

Barnes Walker Estate Planning

Ready to Get Started?