Does Maryland Allow Transfer on Death Deeds?

If you want your loved ones to receive the deed to your house or other property when you die, you might think you have to put it in a will.  In some cases, transfer on death deeds and other alternatives might be more useful to avoid putting property through probate, a legal system that comes with fees and delays.

In general, transfer on death deeds are not allowed for real estate or homes, but they might be allowed for other property.  Even so, there are alternatives to using a transfer on death deed for your home, which our lawyers can help you set up.

For help writing or challenging a will or other transfer on death, call the Maryland will and estate planning lawyers at Rice, Murtha & Psoras today at (410) 694-7291.

What is a Transfer on Death Deed?

When someone dies, they can transfer property in three major ways.  First, they can write a will and have it dictate how their assets are transferred and passed on to their heirs.  Second, if they die “intestate” – without a will – then the state’s intestate succession laws will say who gets what share of the estate instead.  Both of these options deal with what is known as “probate” transfers, as wills and intestacy laws both pass property through a court system called “probate.”  The third way to transfer assets is with “non-probate” assets that have their own built-in rules about how to transfer the property upon the owner’s death.  Transfer on death deeds are one of these non-probate transfers.

Many items transfer on death from one party to another without going through probate.  For most of these, it is because they were jointly owned.  For example, if two spouses buy a house together and own it as “tenants by the entirety” or “joint tenants,” then when one spouse dies, the other takes over full ownership.  This has a built-in “right of survivorship.”  Similar processes occur with jointly owned bank accounts.  Other non-probate assets like trusts might have instructions for passing ownership and administration to other parties and passing benefits to a spouse or children after the person who put the money or assets in trust passes.

Transfer on death deeds are another type of non-probate asset.  For a transfer on death deed, the deed (the ownership document for a piece of property) is set to transfer from the person who dies to someone else automatically without passing through probate or going through a will.  These documents list the property in question, the person who originally owns it, their intent to have it transfer on death, and the intended recipient of the property.  These documents work without much additional cost or effort.

Are Transfer on Death Deeds Allowed for Real Estate in Maryland?

Only a handful of states allow transfer on death deeds to be used for real estate, and Maryland is not one of them.

Maryland lawmakers have decided that assets should pass through probate when they can, but transfer on death deeds specifically aim to avoid probate.  As such, transfer on death deeds are barred in Maryland for real estate.

Can You Use Transfer on Death Deeds for Other Property in Maryland?

While we usually associate the term “deed” with land ownership, you might be able to use transfer on death deeds for other assets and property.  Talk to our Rockville, MD will and estate planning lawyers to see if you can put a transfer on death deed on vehicles, bank accounts, investments, or other assets.

Alternatives to Transfer on Death Deeds for Houses and Real Estate in Maryland

If you want to make sure that someone gets your house when you die, there are a few ways you can do that without using a transfer on death deed:

Put it in Your Will

Putting a house or other real estate in your will allows you to transfer it to the intended recipient when you die.  However, any assets that go through probate are tied up in probate until the case is resolved.  They are also often taxed.  As such, one of the alternatives below might make more sense in your situation.

Put the Recipient on the Deed Now

As mentioned in the example above, if two spouses own a house together, the surviving spouse will keep the house when their partner dies.  If you want your spouse to keep your house when you pass, they merely need to be on the deed as a co-owner of the house.

If you want the house to pass to someone else, you can add them to the deed while you are still alive.  For example, if you want your eldest child to have your house, you just need to add them as a joint owner while you are alive, and they will retain ownership when you pass.  Keep in mind, however, that this means you are giving them ownership rights now while you are still alive.  They would have to agree to any sales or renovations or reverse mortgages you might want to go through with while you are still alive.

Keep in mind that only certain types of real estate ownership have a “right of survivorship,” and you must go through the proper procedures to make this kind of survivorship work.

Put the House in Trust

As with the option above, you can always transfer ownership of your house while you are still alive rather than waiting until your will transfers it.  By transferring your house or other assets into a trust, you give ownership rights to the trust to be managed by the trustee – usually you, while you are still alive.  You can also put yourself as the beneficiary so you can stay in the house.  You can set up a trust so that this right passes to your spouse or children or other parties when you die, all without the property needing to go through probate.

Give Yourself a Life Estate

Property ownership is a bundle of specific rights, including the right to use property, profit from it, or dispose of/sell it.  With a life estate, you do not own all of these rights, but instead get to live on the property, but only for your lifetime; the other ownership rights go to someone else – the next tenant.  You also cannot sell or otherwise dispose of the property because you do not own all of the rights to it.

Life estates are quite complex and are not used very commonly anymore.  However, you can transfer the property to your intended heirs now and retain for yourself a life estate so you can continue living there without paying rent or anything like that.  Again, this means transferring ownership while you are still alive, which comes with limitations.

Call Our Estate Planning Attorney in Maryland Today

For a free review of your case, call our Silver Spring, MD will and estate planning lawyers at Rice, Murtha & Psoras at (410) 694-7291 today.