For most homeowners, keeping a house out of probate is their biggest probate-avoidance wish—and challenge. A living trust works well, but not everyone wants to go to the expense and trouble of creating one. Joint tenancy isn't always the best option, either. Here's good news: More and more states are offering an easy and effective alternative for real estate that's located within their borders.
This alternative is called a transfer-on-death (TOD) deed (also called a beneficiary deed in some states). It's like a regular deed used to transfer real estate, with a crucial difference: It doesn't take effect until your death. For more information on TOD deeds, see Transfer-on-Death Deeds: An Overview.
If you own real estate in any of the states listed below, you can use a TOD deed to leave that property to someone. Like most deeds, TOD deeds must be signed, notarized, and filed in the land records office (often called a register of deeds or recorder of deeds, or combined with a county clerk's office) in the county where your real estate is located. A few states (like California) also require your TOD deed to be witnessed. You don't have to be a resident of the state to use a TOD deed.
District of Columbia
Each state has its own laws governing what needs to be in a TOD deed. You can use a service like WillMaker, which offers guided interviews to help you complete a TOD deed that's valid in the state where you own real estate. (It can also help you create other estate planning documents, like wills and health care directives.) An estate planning lawyer can also help you draft a TOD deed. But if you're thinking about hiring a lawyer, you might also consider whether a living trust suits your aims better than a TOD deed. (See Transfer on Death Deeds vs. Living Trusts.)
If you don't see your state on the above list, it does not yet allow transfer-on-death deeds. However, it might adopt TOD deeds in the future, as more and more states are headed in this direction.