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What Is a Transfer-on-Death Deed?

A transfer-on-death deed is a specific type of property deed that does not become active immediately.
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  • Written By: Alexis W.
  • Edited By: Heather Bailey
  • Last Modified Date: 24 October 2014
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A transfer-on-death deed is a specific type of property deed that does not become active immediately. The interest does not vest until the current owner dies. Transfer-on-death deeds are common in real estate and for other property and assets such as bank accounts.

In most countries, there are multiple types of property ownership. A fee simple absolute, for example, is the simplest and most complete type of property ownership. When a party has a fee simple absolute — a term used in both England and the United States — that party owns the right to enjoy and use a property, to sell the property, and to will the property to whomever he likes so that the property will pass to the heir upon his death.

When a transfer-on-death deed is created, it is a more limited type of property ownership. The person who owns the interest in the property no longer has the right to will it to whomever he wants, because the property will transfer to the person who is listed on the deed after the death. In some jurisdictions, the person who owns the right to the property for the remainder of his life is said to have a life estate, and the full-ownership interest in the property transfers to the person named in the transfer-on-death deed upon his death.

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A transfer-on-death deed is an important tool in estate planning. It allows a person to leave property or assets to someone without leaving a full formal will. This means that the probate process, and in some cases inheritance taxes, can be avoided.

It also simplifies the process when the death occurs. Instead of having to wait for the property to go through probate, the transfer-on-death deed becomes immediately valid upon the death. As a result, the interest vests as soon as the death occurs.

In order to prove ownership to a piece of property or asset owned with a transfer-on-death deed, the individual named on the deed simply has to produce both the deed and some proof of the death. In most cases, a death certificate is appropriate. The rules for this vary depending on the country.

A transfer-on-death deed needs to be recorded with the appropriate officials in cases of real property. Most often, the appropriate official is the county clerk within the state the property is owned. Different rules apply for different jurisdictions and different types of assets.

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anon74317
Post 1

my mother died in December 2009. she had a beneficiary deed which is in mine and my five siblings' names. it has been done that way for 17 years. we live in mo. after her death my brother recorded her death and the deed. Can medcaid or medicare put a lien against the house for anything?

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