Maryland's New Transfer-on-Death Deed: Is It Right for Your Estate Plan?

Jul 11

For years, Maryland homeowners have asked the same question:

"Can I leave my house to my children without probate, but without creating a trust?"

Beginning October 1, 2026, the answer is finally yes.

Maryland recently enacted the Transfer-on-Death Deed Act, allowing homeowners to record a Transfer-on-Death (TOD) deed that automatically transfers real estate to a named beneficiary upon the owner's death without going through probate.

While this is an exciting new estate planning option, it's important to understand both its benefits and its limitations before deciding whether it's the right choice for your family.

What Is a Transfer-on-Death Deed?

A Transfer-on-Death deed allows you to name one or more beneficiaries who will automatically receive your real estate when you pass away.

Unlike adding someone to your deed today, a TOD deed:

Does not give the beneficiary any ownership rights during your lifetime.
Allows you to continue selling, refinancing, or mortgaging the property without the beneficiary's permission.
Can generally be revoked or changed while you're alive.
Avoids probate for that specific piece of real estate.

In many ways, it functions similarly to naming a beneficiary on a retirement account or payable-on-death bank account.

The Advantages

For many Maryland homeowners, a TOD deed offers several attractive benefits:

Avoids probate for the property.
Relatively inexpensive compared to more comprehensive planning.
Simple to understand.
You retain complete control of your home during your lifetime.
The beneficiary generally receives the property only upon your death.

For someone with a straightforward estate whose primary concern is avoiding probate on a single home, a TOD deed may be an excellent option.

The Limitations

This is where many people assume a TOD deed accomplishes more than it actually does.

A Transfer-on-Death deed only determines who receives the property. It does not answer many of the questions that arise after someone passes away.

For example, a TOD deed does not:

Protect the property from your creditors.
Provide instructions if the beneficiary dies before you.
Protect a beneficiary who is a minor.
Help manage property if you become incapacitated.
Coordinate the distribution of your other assets.
Address estate tax or income tax planning.
Provide asset protection for beneficiaries.
Avoid probate for assets other than the real estate covered by the deed.

In other words, a TOD deed is a useful tool but it is not a complete estate plan.

When a Revocable Trust May Be the Better Choice

For many families, a revocable living trust remains the more comprehensive solution.

A trust can:

Avoid probate for multiple assets, not just your home.
Allow a trustee to manage your assets if you become incapacitated.
Delay distributions to young beneficiaries.
Protect beneficiaries with special needs.
Coordinate your real estate, financial accounts, and personal property under one plan.
Provide detailed instructions that simply cannot be included in a deed.

Think of a Transfer-on-Death deed as a single tool in a toolbox. A revocable trust is the complete toolbox.

Which Option Is Right for You?

A Transfer-on-Death deed may be appropriate if:

You own one primary residence.
Your estate is relatively simple.
You have adult beneficiaries.
Your primary goal is avoiding probate for your home.

A revocable trust may be the better option if:

You own multiple properties.
You have minor children.
You have blended family considerations.
You want incapacity planning.
You want to avoid probate for all of your assets.
You want greater flexibility and control over how your estate is managed.

The Bottom Line

Maryland's new Transfer-on-Death deed is a welcome addition to the estate planning toolbox, and for some homeowners it will be exactly the right solution.

However, like every estate planning tool, it works best when used in the right circumstances. A deed alone cannot replace a comprehensive estate plan, and choosing the wrong approach can create unintended consequences for your loved ones.

If you're wondering whether a Transfer-on-Death deed, a revocable trust, or another planning strategy is best for your situation, speaking with an experienced estate planning attorney can help you make the decision with confidence.

At Holt Legacy Law, we help Maryland families create estate plans that fit their goals- not just the newest legal trend.