Transfer on Death Deed in New York: Rules, Recording, and Revocation

A transfer on death deed in New York lets a property owner name one or more beneficiaries who will inherit real estate automatically at the owner’s death, without probate. The tool became available on July 19, 2024 under Real Property Law § 424.¹ You keep full ownership and control while you are alive, and you can revoke or change the deed at any time. What a TOD deed does not do is shield the property from your creditors or from Medicaid estate recovery, and that surprises many people.

What Property You Can Transfer

The statute covers any interest in real property located in New York that is transferable at the owner’s death.¹ Single-family homes qualify. So do condominiums, multi-unit buildings, vacant land, and commercial or investment property. There is no residential-only restriction and no cap on the number of units.

Cooperative apartments are the exception. A co-op owner holds shares in a corporation and a proprietary lease rather than a direct interest in real property, and the statute reaches only real property. If you own a co-op in New York City or anywhere else in the state, a TOD deed is not available; a revocable trust or a will is the alternative.

What the Deed Must Contain

A valid TOD deed identifies the transferor (the owner) and every named beneficiary by full legal name and current address.¹ The property has to be described by its formal legal description, not just its street address. You can pull the legal description from the current deed or from county tax assessment records. It usually contains metes-and-bounds measurements or a lot and block number. A wrong or sloppy description is one of the fastest paths to a rejection at recording or a challenge later.

The deed also has to state expressly that the transfer takes effect at the owner’s death.¹ That language is what distinguishes a TOD deed from an outright gift. It preserves your right to sell, mortgage, or occupy the property during your life, and it prevents the beneficiary from having any legal interest until you die.

If you name more than one beneficiary, specify how they will hold title. Tenants in common each own a defined share that passes to their own heirs. Joint tenants with rights of survivorship pass the deceased co-owner’s share automatically to the survivors. Leaving this ambiguous invites the court fight the TOD deed was supposed to prevent.

If a Beneficiary Dies Before You

A beneficiary’s interest is contingent on surviving the owner. If a named beneficiary dies first, that share lapses.¹ Where there are several beneficiaries holding concurrent interests, the lapsed share is redistributed proportionally to the survivors rather than passing through the deceased beneficiary’s estate. If the only named beneficiary predeceases you, the deed accomplishes nothing and the property will pass under your will or by intestacy. Revisit the deed after any beneficiary’s death.

Signing and Recording the Deed

The owner must sign in front of two witnesses and a notary public.¹ Both witnesses have to be present at the same time and watch the signing. The statute does not explicitly disqualify a beneficiary from serving as a witness, but using disinterested witnesses removes an easy line of attack on the deed.

The capacity required to sign a TOD deed is the same as the capacity required to make a will.¹ The statute is silent on whether an agent under a power of attorney can execute a TOD deed on the owner’s behalf, so anyone in that situation should get advice from a New York attorney before trying.

Recording Is What Makes the Deed Effective

A TOD deed has no legal effect unless it is recorded in the county clerk’s office where the property sits, before the owner dies.¹ This is the single most important step. Sign it, notarize it, then get it to the clerk. If you die before it is recorded, the property goes through probate as though the deed were never made.

Recording a TOD deed does not require the RP-5217 Real Property Transfer Report or the TP-584 transfer tax form that accompany a normal sale.² Your upfront cost is the county recording fee, which varies by county but generally runs roughly $40 to $55 as a base charge plus a per-page fee.

What the Beneficiary Does After You Die

When the owner dies, the beneficiary records a notice of death or affidavit of survivorship in the county clerk’s office where the original TOD deed was filed, together with a certified copy of the death certificate.¹ That step updates the public land records. Because the TOD deed operates outside the will, the property bypasses Surrogate’s Court entirely, along with the time and legal fees that go with it.

Title then vests in the beneficiary, who can sell, lease, or refinance. The transfer is not risk-free, though. Creditor exposure and Medicaid recovery, described next, can reach the property after the transfer. Waiting out those windows before a sale is worth the patience.

Creditor Claims and the 18-Month Window

A TOD deed does not put the property beyond your creditors. Under RPL § 424(14), if your probate estate does not have enough assets to cover allowed claims or a statutory allowance to a surviving spouse or child, creditors can reach property that was transferred by TOD deed.¹ Where several properties passed by TOD deed, the liability is apportioned among them in proportion to each property’s net value at death.

A creditor has to bring the claim within 18 months of the owner’s death.¹ That is longer than the seven-month window that typically applies in a probate estate. A beneficiary who sells or refinances quickly can end up entangled if a claim surfaces later.

Medicaid Estate Recovery

New York’s Medicaid estate recovery program can recoup long-term care costs from a broad range of assets in which the deceased had an interest at death, including property that passed by survivorship arrangements, living trusts, and similar mechanisms.³ Since the owner of a TOD deed keeps full ownership until death, the property remains a countable resource during life and is likely reachable by Medicaid recovery after death. A TOD deed is not a substitute for an irrevocable Medicaid asset protection trust if the goal is protecting the home from long-term care costs.

If There Is a Mortgage

Beneficiaries often ask whether inheriting a mortgaged property triggers the loan’s due-on-sale clause. Federal law generally protects family members here. Under the Garn-St. Germain Act, a lender cannot enforce a due-on-sale clause when property passes to a relative because of the borrower’s death, provided the property is residential with fewer than five dwelling units.⁴ The beneficiary takes the property subject to the mortgage but does not have to refinance or pay it off on the spot. If the beneficiary is not a relative, this protection does not apply and the lender may call the loan.

Tax Treatment

Stepped-Up Basis

Property received by TOD deed qualifies for a stepped-up basis under federal tax law. The beneficiary’s basis is the property’s fair market value on the date of the owner’s death, not what the owner originally paid for it.⁵ If you bought your home for $200,000 and it was worth $600,000 when you died, the beneficiary’s basis is $600,000. A sale shortly after death near that value generates little or no capital gains tax. That is a meaningful advantage over a lifetime gift, which carries over your original basis and can produce a large tax bill for the recipient.

Estate Tax

Avoiding probate does not remove the property from your taxable estate. For 2026 the federal estate tax exemption is $15,000,000, well above most New York homeowners.⁶ New York has its own estate tax with a much lower exemption of $7,350,000 for deaths in 2026.⁷ New York’s tax also has a cliff: if the taxable estate exceeds 105% of the basic exclusion amount, the exemption disappears entirely and the whole estate is taxed from the first dollar. For estates hovering near the line, the value of property passed by TOD deed still counts toward that calculation.

Revoking or Changing the Deed

A TOD deed stays fully revocable during your life. There are two ways to revoke one. You can execute and record a formal instrument of revocation that expressly identifies and revokes the earlier deed. You can also record a new TOD deed for the same property that either expressly revokes the earlier one or is inconsistent with it; the most recently recorded deed controls.¹ Either way, the revoking instrument must be notarized and recorded in the county clerk’s office before you die.

What you cannot do is revoke a recorded TOD deed by tearing it up or writing “void” across your copy.¹ The recorded copy at the clerk’s office still controls. Revocation requires a new recorded document.

Divorce Does Not Revoke the Deed

Some states automatically cancel a spousal beneficiary designation on divorce. New York’s TOD deed statute does not. If you named your spouse as a beneficiary and later divorced, the deed stays in effect until you record a revocation or a replacement.¹ It is an easy thing to forget in the middle of a divorce, and forgetting means your former spouse inherits the property.

1
New York State Senate. New York Real Property Code 424 – Transfer on Death Deed
2
New York State Department of Taxation and Finance. Form RP-5217-PDF, Real Property Transfer Report Frequently Asked Questions
3
New York State Department of Health. Important Information Regarding Medicaid Estate Recovery
4
GovInfo. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions
5
Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent
6
Internal Revenue Service. What’s New – Estate and Gift Tax
7
New York State Department of Taxation and Finance. Estate Tax