MVLS Webinar Training on Maryland’s New Transfer-on-Death Deed

Presented by: Megan Good, Evan Farr, and Jeffrey Thompson, with opening remarks by Delegate N. Scott Phillips
Summary by: David Jonathan Taylor, CELA 

Maryland’s New Transfer-on-Death Deed: Medicaid Planning, Recording Issues, and Title Recognition

On July 30, 2026, the Maryland Volunteer Lawyers Service presented an overview of Maryland’s new Transfer-on-Death Deed Act. The legislation takes effect October 1, 2026, and permits a Maryland property owner to designate a beneficiary who will receive the property at the owner’s death without probate. The program featured Megan Good of MVLS, chapter member Evan Farr, and Jeffrey Thompson of the Maryland Land Title Association. While the discussion focused on the statutory form and its limitations, this summary focuses on  Medicaid planning, implementation problems, and why Maryland title insurers are expected to recognize these transfers despite problems with the comparable process in the District of Columbia.

Purpose and Operation of the Transfer-on-Death Deed

The new deed allows a homeowner to designate a beneficiary to receive the property at death while the owner retains complete control during life.

• The beneficiary receives no present legal or equitable interest.
• The owner may revoke the deed and remains free to sell or transfer the property.
• The deed must be recorded before the owner dies.
• The statutory form was created primarily for low- and moderate-income homeowners who cannot afford legal assistance and might otherwise make improper transfers or leave tangled titles.
• The statute also provides forms for revocation and notification after death.
• Megan Good explained that attorneys generally should customize the deed rather than rely on the bare-bones statutory form and its presumptions.
• Attorneys should determine whether a transfer-on-death deed, life estate deed, or another planning tool best serves the client’s intentions.
• Any customized deed must provide that the transfer occurs at death and remains revocable.

Medicaid Treatment of the Three Deed Options

Evan Farr compared the Medicaid consequences of a life estate deed without powers, a life estate deed with powers, and a transfer-on-death deed.

Key: ✓ favorable or applies; ✕ does not apply or is unfavorable; ⚠ potential penalty.

Farr identified three additional reasons the transfer-on-death deed may be particularly useful for a single Medicaid applicant:

• Intent to return home: The owner may continue relying on the intent-to-return-home exclusion. A life estate deed with powers leaves the full equity countable even when the applicant expresses an intent to return home. The panel did not address this issue for a life estate deed without powers.
• Probate and estate recovery: The transfer-on-death deed passes the property outside probate and therefore avoids Maryland Medicaid estate recovery under the current recovery system. The panel did not resolve that question for the two life estate deeds as part of this comparison.
• Preferred option for a single applicant: Considering the gift, lookback, countability, intent-to-return, and estate-recovery consequences together, Farr described the transfer-on-death deed as the “clear winner.”
• Maryland Real Property § 14-1007 provides that the transfer-on-death deed does not affect the owner’s or beneficiary’s eligibility for public assistance during the owner’s lifetime.
• Farr acknowledged that Medicaid might attempt to treat the deed like a life estate deed with powers, but he believed that result would conflict with the statute and should be challenged.

Why Farr Limited the Strategy to Single Applicants

Farr expressly limited his description of the transfer-on-death deed as the “clear winner” to a single Medicaid applicant.

• When a healthy spouse owns the home, the healthy spouse ordinarily should have a Medicaid-style will.
• If the healthy spouse dies first, the home and other assets can pass through probate into a testamentary special needs trust for the Medicaid spouse.
• The assets can remain protected while being available for the Medicaid spouse’s benefit.
• After the Medicaid spouse’s death, the remaining assets can pass to the other beneficiaries.
• Because a transfer-on-death deed bypasses probate, Farr said it would not be used for the home in that situation.

TEFRA Liens

Avoiding probate estate recovery does not necessarily prevent Maryland from imposing a TEFRA lien during the Medicaid recipient’s lifetime.

• The recipient’s intent to return home initially protects the property.
• Maryland would need a medical determination that there is no realistic possibility of the recipient returning home.
• The recipient must receive an opportunity for a hearing before a lien is imposed.
• Farr reported that he has never encountered a Maryland TEFRA lien and did not know another Maryland Medicaid practitioner who had encountered one.
• He attributed that practical experience to the procedural requirements Maryland must satisfy before imposing the lien.

Implementation May Be Going Off the Tracks

The legislation was intended to remove recording barriers that affect low-income homeowners, but the presenters identified immediate implementation problems.

• Howard University law students assisting MVLS found that 17 of Maryland’s 24 jurisdictions require outstanding public taxes, assessments, and charges to be paid before recording a life estate deed with powers.
• The new statute permits a transfer-on-death deed to be recorded without obtaining a lien certificate or first satisfying those charges.
• Because the deed does not presently transfer ownership, the implementation group hoped it could be submitted directly to Land Records.
• Finance offices contacted during implementation were nevertheless indicating that the deeds would have to pass through their offices.
• Farr questioned the legal basis for finance-office review when no present transfer of title occurs.
• Thompson explained that recordation tax is triggered by presentation of the document rather than solely by a present transfer of ownership.
• Thompson asked practitioners initially to focus on residential transfers for the homeowners the legislation was intended to assist.
• Good emphasized that a lien certificate should not be required and encouraged practitioners to oppose any demand for one.

Why the Maryland Deed Should Work When the D.C. Deed Has Encountered Problems

David Taylor asked the panelists why Maryland title insurers should recognize a transfer-on-death deed when District title companies have required an estate to be opened despite the use of a comparable deed.

• The question concerned title-insurance recognition and creditor claims—not a comparison of the jurisdictions’ Medicaid estate-recovery statutes.
• Farr reported that Virginia title companies have recognized transfers made under transfer-on-death deeds.
• In the District, title companies have refused to rely on the deed alone and have required probate.
• Thompson explained that District creditor claims are not terminated until creditors receive notice and an opportunity to file claims, a process that depends on opening an estate.
• In Maryland, a creditor may file a claim against a deceased person in the Register of Wills’ claims docket without waiting for an estate to be opened.
• Thompson therefore expected Maryland title insurers to recognize the transfer upon proof of the owner’s death, subject to existing liens and encumbrances.

Principal Takeaways

The transfer-on-death deed creates an important new probate-avoidance option, particularly for homeowners who cannot obtain an attorney and for certain single Medicaid applicants.

• Attorneys generally should customize the deed rather than rely on the statutory form and its presumptions.
• For a single applicant, the deed is not a gift, does not make the home countable, and keeps the property outside the probate estate presently subject to Maryland Medicaid estate recovery.
• Planning for married couples may instead require the healthy spouse’s home to pass through probate into a testamentary special needs trust.
• The largest immediate uncertainty is the recording process and whether finance offices will require review despite the statute’s elimination of the lien-certificate requirement.
• Maryland’s claims docket provides a means for creditors to preserve claims without opening an estate, which the presenters expected to prevent the title-insurance obstacle encountered in the District.