We Were Just Going to Add the Kids to the Deed — Maryland’s New Law Changes That Conversation

Almost every week, someone sits down in our office and says a version of the same thing: “We were just going to put the kids on the deed. That way the house skips probate and nobody has to deal with the courthouse.”

The instinct is right. The method is expensive.

As of October 1, 2026, Maryland gives families a better tool. House Bill 738 created the transfer-on-death deed — a recorded document that leaves your real estate to whoever you name, automatically, without probate, and without giving up anything while you are alive.

It is genuinely useful. It is also going to be misused by people who think a form is the same thing as a plan.

Until October 1, Maryland was one of the states without this option. Families who wanted their house to pass outside of probate had three choices: a revocable living trust, a life estate deed, or the do-it-yourself version — adding a child’s name to the deed and hoping for the best.

House Bill 738 was signed on May 26, 2026 and took effect October 1. The new rules are in the Maryland Code at Real Property §§ 14-1001 through 14-1014. You can now sign, notarize, and record a deed that says, in effect, when I die, this property goes to my daughter. Until then, nothing happens. You still own the house outright. You can sell it, refinance it, rent it, or change your mind and name someone else. Your beneficiary has no say and does not need to consent — in fact, they never need to know.

One detail matters and gets missed: the deed has to be recorded in the land records before you die. A signed deed sitting in a drawer does nothing.

This is the part almost nobody sees coming, so here is the arithmetic.

When you add your child to your deed during your lifetime, you have made them a gift of half your house. And a gift carries your original purchase price with it. When they eventually sell, the IRS measures their profit from what you paid in 1994, not what the house was worth when you died.

Say you bought in Severna Park in 1994 for $120,000, and the house is worth $620,000 today.

Add her to the deed now: about $37,500 in tax. Her half carries your $60,000 basis. She sells after you die and shows roughly $250,000 of gain — about $37,500 in federal capital gains tax at 15%, before Maryland state and county income tax.

Leave it to her at your death: close to $0. By trust, by will, or by transfer-on-death deed, the cost basis resets to date-of-death value. She sells for $620,000, shows almost no gain, and owes essentially nothing.

Same house. Same daughter. Same outcome you wanted. One version costs your family tens of thousands of dollars, and it is the version people choose because it felt simpler.

(Figures are illustrative. Rates and results depend on the specific property and the family’s tax situation.)

That is before we get to the rest of it. Once your child is on the deed, their half is exposed to their creditors, their divorce, and their judgment creditors. You cannot sell or refinance without their signature. And if they are sued the year before you die, your house is part of the conversation.

It fixes the tax problem, because nothing transfers until you die. The property stays yours, in every legal sense, until it isn’t.

You keep full control: you can sell, refinance, lease, or revoke at any time. Your beneficiary’s creditors and divorce cannot reach the property while you are alive. It avoids probate for that parcel entirely. Because the transfer happens at death, your beneficiary gets the reset cost basis described above. And it is revocable even if the document itself says otherwise — the statute protects against exactly that kind of pressure.

For the right household — a modest estate, one property, one or two beneficiaries who get along, no minor children, no long-term care exposure — this is a real improvement over what Maryland offered before.

Your beneficiary dies before you do. If you named no alternate, the house falls back into your estate and goes through the probate you were trying to avoid.

Your life changes and the deed doesn’t. Maryland’s law voids a transfer-on-death deed naming a spouse if you later divorce or have the marriage annulled, and revokes the deed if you later marry and have children. Those are sensible defaults. They are also silent — nobody sends you a letter.

You leave it to a niece, a nephew, or a friend. Maryland charges a 10% inheritance tax on property passing to anyone outside the exempt list. Spouses, children, grandchildren, stepchildren, parents, grandparents, siblings, your children’s spouses, and registered domestic partners pay nothing. Nieces, nephews, cousins, and friends pay ten cents on the dollar. A transfer-on-death deed does not change that. On a $620,000 house left to a nephew, that is a $62,000 bill — and Maryland’s estate and inheritance taxes are the second layer most families never plan for.

You need long-term care. A transfer-on-death deed is not asset protection. It does not start the five-year clock, and it does not reliably defeat a Medicaid lien. If nursing home costs are the thing keeping you up, the tool for that is a different one — we wrote about it in our piece on Medicaid asset protection trusts.

You leave it to three children. They now own a house together. If two want to sell and one wants to keep it, you have handed them a partition dispute instead of an inheritance.

Everything else you own is untouched. The deed covers one parcel of real estate. Not your bank accounts. Not your retirement accounts. Not your personal property. Not who raises your minor children. And — this is the big one — not who makes decisions for you if you are alive but can no longer make them yourself. A transfer-on-death deed does nothing at all while you are living. Incapacity is where most families actually get hurt, and no deed of any kind addresses it.

A transfer-on-death deed may be enough if you own one property, your beneficiaries are exempt from Maryland inheritance tax, there is only one of them or they are genuinely aligned, you have no minor children, and long-term care is not a live concern.

You need more than a deed if you own property in more than one state, you are leaving anything to someone outside the exempt list, you have minor children or a beneficiary with special needs, you want conditions on how or when someone inherits, your estate approaches Maryland’s $5 million estate tax threshold, or long-term care is on the horizon.

For most of the families we see, a revocable living trust still does more work — it handles every asset, not one; it plans for incapacity, not just death; and it keeps the whole thing private. The new deed is a good tool. It is not a plan.

Does Maryland allow transfer-on-death deeds for real estate? Yes. Maryland’s transfer-on-death deed law (House Bill 738, Real Property §§ 14-1001 through 14-1014) took effect October 1, 2026. A transfer-on-death deed passes real estate to the beneficiaries you name at your death without probate, as long as the deed is recorded in the county land records before you die.

Can I change or revoke a transfer-on-death deed in Maryland? Yes. You keep full ownership while you are alive and can sell, refinance, or revoke at any time by recording a new transfer-on-death deed, an instrument of revocation, or a deed conveying the property. The deed is revocable even if it says otherwise, and the beneficiary does not need to consent or be told.

Is a transfer-on-death deed better than adding my child to my deed? Usually. Adding a child to the deed during your life is generally a gift, and the child can take your original cost basis, which can mean a large capital gains tax when the house is sold. Property that passes at death by trust, will, or transfer-on-death deed generally receives a basis reset to date-of-death value. Adding a child also exposes the property to the child’s creditors and divorce.

Does a transfer-on-death deed avoid Maryland inheritance tax? No. Maryland’s 10% inheritance tax still applies to property passing to anyone outside the exempt group, such as nieces, nephews, cousins, and friends. Spouses, children, grandchildren, stepchildren, parents, grandparents, siblings, children’s spouses, and registered domestic partners are exempt.

What happens if the beneficiary of a Maryland transfer-on-death deed dies first? If the beneficiary does not survive you and no alternate is named, that beneficiary’s interest lapses and the property can end up passing through your estate and probate. Naming an alternate beneficiary avoids that.

Does a transfer-on-death deed protect a home from nursing home costs? No. A transfer-on-death deed is not asset protection. It does not start Medicaid’s five-year look-back clock and should not be relied on to defeat a Medicaid lien. Families concerned about long-term care costs need a different strategy, such as a Medicaid asset protection trust.

Fifteen minutes. No legal advice, no commitment. We talk about what you own, who you want it to go to, and what you are actually worried about. Then we tell you plainly whether a deed is enough or whether it isn’t.

If your plan right now is to add the kids to the deed, please make this call before you do. It is far easier to do it right than to unwind it afterward.

We serve families in Anne Arundel, Prince George’s, Queen Anne’s, Calvert, St. Mary’s and Kent Counties, and elsewhere in Maryland. Flat fee, agreed before any work begins.

Call 410-570-1671 or schedule your introductory call.

Johnson Law LLC is an estate planning and elder law firm based in Annapolis, Maryland. This article is general information about Maryland law and is not legal advice for your situation. Reading it does not create an attorney-client relationship. Tax outcomes depend on facts specific to you and your family, and you should speak with an estate planning attorney before acting.