Maryland does not allow transfer on death deeds. More than 30 states, including Virginia and the District of Columbia, let owners name a beneficiary directly on a deed so the property passes automatically at death, but Maryland has never adopted that tool.1The Maryland People’s Law Library. Frequently Asked Questions – Deeds If you own Maryland real estate and want it to skip probate, you need one of four alternatives: a life estate deed, a revocable living trust, joint tenancy with right of survivorship, or tenancy by the entirety. Each accomplishes the same goal through a different legal structure, and each carries its own trade-offs on control, cost, taxes, and creditor exposure.
Why the TOD Deed Isn’t an Option Here
Transfer on death deeds spread across the country after the Uniform Law Commission published a model act in 2009. Maryland’s legislature has considered the idea but has not passed it.1The Maryland People’s Law Library. Frequently Asked Questions – Deeds Real estate held in your individual name at death goes through probate unless you restructure ownership during your lifetime using one of the tools below.
Four Ways to Pass Maryland Real Estate Outside Probate
Life Estate Deed
A life estate deed divides ownership into two pieces. You keep the right to live in and use the property for the rest of your life. A named remainder holder takes full ownership automatically at your death, with no probate. The trade-off is permanence. The moment you sign the deed, the remainder holder has a legal stake in the property. You cannot sell or refinance without their cooperation, and you cannot change your mind about the beneficiary unless they agree.
The tax result is favorable. Because the property is still included in your taxable estate under federal law, the beneficiary receives a stepped-up basis equal to fair market value at your death.2Office of the Law Revision Counsel. 26 U.S. Code 1014 – Basis of Property Acquired From a Decedent Appreciation that built up during your lifetime effectively disappears for capital gains purposes. If the property is sold while you’re still alive, the remainder holder may owe capital gains tax on their share, calculated from your original purchase price.
Revocable Living Trust
A revocable living trust gives you the most flexibility of any option. You create the trust, retitle the property into the trust’s name, and serve as your own trustee. You keep the ability to sell, refinance, amend the terms, or dissolve the trust entirely. At your death, the successor trustee you named distributes the property to your beneficiaries without probate.
Two things trip people up. First, the trust only works for property you actually retitle into it. Signing the trust document without executing and recording a new deed leaves the property in your individual name, and it will go through probate anyway. Second, a revocable trust does not shield assets from creditors during your lifetime. Because you retain the power to revoke it, courts treat the trust’s assets as yours. Creditor protection only begins after your death, when the trust typically becomes irrevocable.
Joint Tenancy With Right of Survivorship
Adding a co-owner as a joint tenant with right of survivorship means the survivor automatically owns the whole property when the other dies. Maryland law requires the deed to say so expressly. Without survivorship language, the law presumes a tenancy in common, which sends the deceased owner’s share through probate.3Maryland General Assembly. Maryland Code Real Property 2-117 – Presumption Against Joint Tenancy
The risks are meaningful. Adding a joint tenant is an immediate transfer of an ownership interest, which can trigger federal gift tax reporting if the transferred interest exceeds $19,000 in 2026.4Internal Revenue Service. Frequently Asked Questions on Gift Taxes The new co-owner has full legal rights, meaning they could force a sale through a partition action, and their personal creditors could reach their share. You cannot undo the arrangement without their consent.
Tenancy by the Entirety
For married couples, tenancy by the entirety is usually the strongest option. It functions like joint tenancy with survivorship but adds creditor protection the other methods lack. Neither spouse can unilaterally transfer or encumber their interest, and a creditor of only one spouse generally cannot reach the property. When one spouse dies, the survivor takes full ownership automatically outside probate.5The Maryland People’s Law Library. Joint Ownership of Real Property
Divorce converts a tenancy by the entirety into a tenancy in common, ending both the survivorship right and the creditor protection.5The Maryland People’s Law Library. Joint Ownership of Real Property If your estate plan depends on this ownership form, divorce is a signal to redo the plan immediately.
Getting Each Document Right
Maryland is strict about deed formalities. A document that misses a requirement can be rejected at recording or challenged later.
- A life estate deed must clearly identify both the life tenant and the remainder beneficiary, and the grantor’s signature must be acknowledged before a notary. Vague language about who takes the remainder is where problems most often start.
- A revocable living trust must be signed and dated by the grantor, typically with a notarized acknowledgment. You then have to execute and record a new deed transferring the property from your individual name into the trust’s name. The trust document by itself does not move title.
- A joint tenancy deed must contain express survivorship language. All co-owners sign, and the deed must be notarized. Without the magic words, Maryland defaults to tenancy in common.3Maryland General Assembly. Maryland Code Real Property 2-117 – Presumption Against Joint Tenancy
- A tenancy by the entirety deed must identify both spouses and state they are married. Both sign, and the deed is notarized. Maryland presumes this form for conveyances to married couples, but explicit language removes any ambiguity.
Every deed also needs a certification of preparation. Either a Maryland-licensed attorney certifies that the deed was prepared by or under their supervision, or a party named in the deed certifies they prepared it themselves.6Maryland General Assembly. Maryland Code Real Property 3-104 – Prerequisites to Recording Without it, the clerk will reject the recording. Deeds between spouses or former spouses and deeds moving property into or out of a revocable living trust are exempt from Maryland’s recordation tax, so estate planning transfers with no money changing hands usually cost only the flat recording fee.7Maryland General Assembly. Maryland Code Tax-Property 12-108 – Exemptions From Tax
Taxes That Should Influence Your Choice
Stepped-Up Basis
Property inherited at death (through probate, a trust, a life estate deed, or survivorship) generally receives a new tax basis equal to fair market value at the date of death.2Office of the Law Revision Counsel. 26 U.S. Code 1014 – Basis of Property Acquired From a Decedent If parents bought a house for $80,000 and it’s worth $400,000 when they die, the beneficiary’s basis becomes $400,000, and selling at that price triggers no capital gains tax. All four probate-avoidance methods above preserve this step-up, though through slightly different mechanisms.
Gift Tax on Lifetime Transfers
Adding someone to your deed as a joint tenant is a gift for federal tax purposes. In 2026, you can give up to $19,000 per recipient without filing a gift tax return; married couples giving jointly can give up to $38,000.4Internal Revenue Service. Frequently Asked Questions on Gift Taxes Interests above that threshold require Form 709. Actual tax usually isn’t owed because of the lifetime exemption, but missing the filing is a common mistake.
Maryland Inheritance Tax
Maryland imposes both an estate tax and a separate inheritance tax. The inheritance tax is 10% and applies to property passing to nieces, nephews, aunts, uncles, cousins, and unrelated individuals. Transfers to a spouse, children, grandchildren, stepchildren, parents, grandparents, siblings, and registered domestic partners are fully exempt.8Register of Wills. Inheritance Tax If your intended beneficiary is outside the exempt group, that 10% cost changes the math on which structure makes sense.
Maryland Estate Tax
Maryland’s state estate tax applies to estates valued above $5 million, with a top rate of 16%. That threshold is frozen and has not tracked the federal exemption, which sits at $15 million for 2026.9Internal Revenue Service. Estate Tax An $8 million estate can owe no federal estate tax while still owing Maryland tax on the amount over $5 million. Probate-avoidance tools do not automatically shrink estate tax liability. Property held in a revocable trust or a life estate is still counted in your taxable estate for both federal and state purposes.
If Medicaid Might Be in the Picture
Anyone who may need Medicaid-funded long-term care should think carefully before transferring property. When you apply for Medicaid, the state looks back 60 months to see whether you transferred assets for less than fair market value.10Centers for Medicare & Medicaid Services. Transfer of Assets in the Medicaid Program – Important Facts for State Policymakers A life estate deed, a gift of a joint tenancy interest, or a transfer into a trust within that window can create a penalty period during which Medicaid won’t pay for your care.
After you die, Medicaid can also seek repayment from your estate for benefits paid on your behalf if you were 55 or older.11Medicaid.gov. Estate Recovery A properly structured life estate or trust can sometimes limit recovery, and Medicaid cannot recover at all if you’re survived by a spouse, a child under 21, or a blind or disabled child of any age. These rules are technical enough that planning without professional help creates real risk.
Changing Your Mind Later
Which method you pick determines how easily you can undo or adjust the plan when circumstances shift.
- A life estate deed is largely irrevocable. You cannot take the remainder back or change the beneficiary without the remainder holder’s agreement. If the relationship deteriorates, you are stuck unless a court intervenes. This is the biggest downside of the tool.
- A revocable living trust can be amended or revoked at any time while you’re mentally competent. Changes must be in writing, and removing property requires a new recorded deed transferring title back to your individual name.
- A joint tenant can sever the joint tenancy by transferring their interest, which converts ownership to a tenancy in common and destroys the survivorship right. Removing the other owner from the deed, though, requires their cooperation and a new deed signed by all parties.5The Maryland People’s Law Library. Joint Ownership of Real Property
- Neither spouse can act alone on a tenancy by the entirety. Both must agree to any change, and divorce automatically converts the ownership to tenancy in common.
The right choice depends on your marital status, how much control you want to keep, whether creditor protection matters, and whether Medicaid could be in your future. For most married couples who simply want the property to pass to the surviving spouse, tenancy by the entirety handles the job with the least effort. For anyone who wants to keep the ability to sell or change beneficiaries, a revocable living trust is usually the better fit despite the higher setup cost. A life estate deed is simple and cheap but locks you in. Joint tenancy with a non-spouse is the option most likely to backfire, and it deserves the hardest look before you sign.