Starting October 1, 2026, Maryland homeowners will have a new option for transferring their property upon death without the need for probate court. Under a new law, homeowners can designate a beneficiary through a recorded deed, which will not incur any state or county transfer taxes if the property is their primary or secondary residence. This legislation, known as House Bill 738, has been enacted as Chapter 751 of the 2026 laws.
Understanding the Transfer-on-Death Deed
This new transfer-on-death deed allows property owners to name a beneficiary who will inherit the property upon their death. The law defines this process as nontestamentary, meaning it operates independently of a will and can be modified by the owner at any time. The deed remains revocable, even if there are conflicting provisions in other documents, according to the official text of Chapter 751.
While the owner is alive, the beneficiary has no ownership rights and does not need to be informed of their designation. Additionally, the deed does not affect the rights of creditors or the eligibility of either the owner or the beneficiary for public assistance.
Requirements for Validating the Deed
For the deed to be effective, it must be recorded in the land records of the county or Baltimore City where the property is located prior to the owner’s death. The deed must be notarized and recorded in each jurisdiction where the property exists. Homeowners need to ensure that the deed explicitly states the transfer occurs upon the owner’s death, follows the state’s deed execution rules, and is recorded according to the clerk’s procedures, as a clerk may refuse improperly submitted deeds.
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Tax Exemptions and Eligibility
The law provides significant tax relief by exempting the transfer-on-death deed from recordation tax, state transfer tax, and county transfer tax for primary and secondary residences. However, this exemption does not apply to rental properties, vacant land, or other types of real estate, which will still be subject to standard taxes. Homeowners are encouraged to consult the full text of the law for specific property classifications, available on the General Assembly’s HB 738 page.
Deed vs. Will: Key Differences
Once recorded, a transfer-on-death deed cannot be overridden by a will. This means that if a homeowner updates their will to designate a different heir for the property, the original deed remains in effect unless a revocation is recorded. Conversely, if a property is owned jointly, the surviving joint owner retains ownership upon the death of one owner, regardless of the transfer-on-death deed.
What Beneficiaries Should Know
Beneficiaries will inherit the property subject to any existing mortgages or liens at the time of the owner’s death. The deed does not guarantee a clear title, and if a beneficiary does not survive the owner, their share will lapse. Maryland law allows beneficiaries to disclaim all or part of their interest if they choose.
When naming multiple beneficiaries, homeowners can specify the type of ownership in the deed. If unspecified, the law defaults to joint tenancy with the right of survivorship. This law applies to deeds executed before, on, or after October 1, as long as the owner passes away on or after that date.
Potential Conflicts with Existing Wills
Homeowners with existing wills should be aware that a recorded deed takes precedence over prior estate plans. This could lead to confusion if the same property is designated in multiple documents. It’s crucial for homeowners to regularly review their estate planning documents to ensure consistency.
Ensuring Proper Documentation
To avoid unintended consequences, homeowners should conduct a thorough review of their estate planning documents. The “Pass It On Checklist” can help ensure that all beneficiary designations are aligned and that the transfer-on-death deed is properly executed. This proactive approach can prevent complications for families after the owner’s passing.
Audit every beneficiary against the deed with the Pass It On worksheet →
This article was produced with AI assistance and edited for accuracy against the sources linked above.
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