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: A growing number of states now offer an easy and effective alternative for real estate within their borders, and other states are considering adopting it.
This alternative is called a transfer-on-death (TOD) deed or beneficiary deed. It's like a regular deed used to transfer real estate, with a crucial difference: It doesn't take effect until your death. For further 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 real estate to someone. Like regular deeds, TOD deeds must be signed, notarized, and filed in the county's land records office. You don't have to be a resident of the state to use a TOD deed.
Other states do not allow this type of deed. If you try to leave property in another state by deed at your death, it won't work. For example, if you sign a deed transferring your house to your children and stick it in your desk drawer, knowing that they will find it there after your death, the deed won't have any effect. A deed is not a valid substitute for a will (which must be signed in front of witnesses) unless state law specifically allows it.