Maryland's New Transfer on Death Deed

Effective October 1, 2026, Maryland will allow property owners to pass real estate directly to a chosen beneficiary at death, outside of probate, through a new Transfer on Death Deed. Senate Bill 651 passed the General Assembly unanimously. It is a welcome new tool, and also a first iteration of a novel law for Maryland that leaves some questions for practitioners to work through.

How does it work?

In a TOD deed, the owner names a beneficiary who will receive the property automatically at death. During the owner’s life nothing changes. The owner keeps full control, can sell or mortgage the home, and can revoke the deed or name a different beneficiary at any time. Because the transfer happens at death and outside the will, the property avoids probate.

Why does it matter for Medicaid planning?

A TOD deed functions much like a life estate deed with powers. Both keep the owner in control during life, both pass the home outside probate, and neither is a completed gift that triggers a look back penalty. The meaningful difference is Medicaid. With a life estate deed with powers, the retained powers can cause the full value of the home to be counted as an available resource, which can defeat the planning. The TOD deed avoids that, because the statute provides that it does not affect eligibility for public assistance during the owner’s life. For someone whose plan involves Medicaid, that distinction is often decisive.

What about a revocable living trust?

A revocable living trust remains the better fit for many clients. It can hold the home and other assets, provides for management during incapacity, keeps the plan private, and can be amended at any time. It is more expensive to set up and must be funded to work. Like a life estate with powers, it does not shield the home from Medicaid countability during life, because the owner keeps full access and control. The right tool depends on the client’s goals.

What questions remain open?

This is a first iteration of the law, and careful practitioners have flagged points that warrant further review, including the mechanics of any post death filing, how title companies and lenders will treat property that passed by TOD deed, how the deed interacts with existing planning structures, and exactly how these assets relate to the current Medicaid planning exemptions. A TOD deed should be prepared as part of a considered and comprehensive estate plan rather than treated as a fill in the blank form.

How we can help

If you would like to know whether a Transfer on Death Deed fits into your estate plan, or to review an existing plan in light of the new law, the estate planning attorneys at Leffler, Bayoumi & Oliver, LLC would be glad to help. Contact our office to schedule a consultation.