Recognized in roughly 30 U.S. states. The TOD deed is revocable during the owner's life and takes effect only at death. It does not avoid the eventual capital gains question, but it does avoid probate for the affected real estate.
Related terms
Step-Up in Basis
A federal tax rule (IRC §1014) that resets an inherited asset's cost basis to its fair market value on the date of the original owner's death.
Probate
The court-supervised process of validating a will, paying the deceased's debts, and transferring remaining assets to heirs.
Inheritance Tax
A state-level tax paid by the heir on the value of property received from a deceased person.