TOD Deeds in Arizona: Benefits and Pitfalls

September 9, 2025

TOD Deeds in Arizona: When They Help and When They Hurt

A Transfer-on-Death (TOD), also called a beneficiary deed, lets Arizona real estate pass directly to a named person when the owner dies. It avoids probate, and the owner keeps full control during life. A TOD deed does not handle incapacity, it offers no protections for vulnerable beneficiaries, and it fails if it is not recorded before death. Arizona’s rule is in A.R.S. § 33-405 (verified Aug. 27, 2025).

Table of Contents

  1. What Is a TOD (Beneficiary) Deed?
  2. When TOD Deeds Help
  3. When TOD Deeds Hurt
  4. How to Record a Valid TOD Deed in Arizona
  5. Common Mistakes
  6. When to Talk to a Lawyer
  7. Not Legal Advice · CTA
  8. Key Takeaways
  9. FAQ
  10. Internal & External Resources

Beneficiary deeds are popular in Arizona because they are simple and can keep a home out of probate. They are not always the best fit. This guide explains when a TOD deed is helpful and when it can cause problems, with a local focus for Mesa and Maricopa County.

What Is a TOD (Beneficiary) Deed?

In Arizona, a TOD deed is formally called a beneficiary deed. Under A.R.S. § 33-405, an owner can record a deed that names who receives the property at the owner’s death.

  • Recording is mandatory. The deed must be signed, notarized, and recorded with the county recorder before death. In Maricopa County, see the Maricopa County Recorder’s Office.
  • Owner control. During life, the owner can sell, refinance, or revoke the deed.
  • Tax note. Since transfer occurs at death, beneficiaries generally receive a step-up in basis under federal tax rules. See IRS Publication 551 (verified Aug. 27, 2025).
  • Assessor notice after transfer. After a beneficiary deed transfer, the county assessor relies on notice from the beneficiary for mailing and records. See A.R.S. § 42-15101 (verified Aug. 27, 2025).

When TOD Deeds Help

  • Avoiding probate for one Arizona property. Title shifts on death without opening a probate case.
  • Keeping full control while alive. You can revoke or change beneficiaries at any time before death.
  • Simple and cost-effective. Good fit when your main goal is to pass a single property to one person.
  • Alternative to adding a co-owner. Transfers at death without creating present-day co-ownership.
  • Potential tax efficiency. Step-up in basis can reduce capital gains if the beneficiary sells later (IRS Pub. 551).

When TOD Deeds Hurt

  • No incapacity plan. If you become incapacitated, a TOD deed does not let anyone manage or sell the property for you.
  • No protections or conditions. You cannot delay inheritance, protect against creditors, or set rules for use. A trust is better for that.
  • Multiple-beneficiary gridlock. Leaving one property to several people can cause conflict or force a sale as all beneficiaries have to agree on how the property will be used.
  • Debts and liens remain. A beneficiary deed does not eliminate the mortgage of a property. A beneficiary who receives the property under a beneficiary deed takes ownership of the property subject to existing mortgages, HOA liens, or tax liens.
  • Execution mistakes. Wrong legal description, wrong county, or failing to record before death makes the deed ineffective (A.R.S. § 33-405).

How to Record a Valid TOD Deed in Arizona

  1. Prepare the deed. Use the full legal description from your recorded deed. Include language showing it is effective on death, as permitted by A.R.S. § 33-405. We recommend that you engage the services of an experienced Arizona estate planning attorney to assist you in the proper preparation of such a deed as there are many details that could cause the deed to be invalid if not drafted correctly.
  2. Sign and notarize. Execute the deed while you are living and competent.
  3. Record in the correct county. Record with the county where the property is located. For Mesa addresses, that is usually the Maricopa County Recorder. Check current recording options and fee schedule on the Recorder’s site.
  4. Keep originals and proof. Retain recorded copies and consider telling your beneficiaries where to find them.
  5. Coordinate with the assessor after death. Beneficiaries should update mailing information with the county assessor after the transfer (A.R.S. § 42-15101).

Common Mistakes

  • Not recording the deed before death.
  • Using an incomplete or incorrect legal description.
  • Naming several beneficiaries without a plan to share costs or decide on selling.
  • Assuming debts disappear. They do not.
  • Relying on a TOD deed when you really need incapacity planning or beneficiary protections that a trust can provide.

When to Talk to a Lawyer

Talk to an Arizona estate planning attorney if you have blended families, minor children, a property with a mortgage or liens, rental property, or if you need creditor protection or staged inheritance. A lawyer can align your TOD deed with your will, powers of attorney, and any trust so your plan works together.

Not Legal Advice · CTA

Not legal advice. This article is for general information only.

Considering a TOD deed in Arizona? The Woodruff Law Firm can help you decide if it fits your goals and draft the deed correctly. Schedule a consultation with our Mesa team.

Key Takeaways

  • A TOD deed transfers Arizona real estate outside probate.
  • It is simple, revocable, and inexpensive for straightforward plans.
  • It does not plan for incapacity or protect beneficiaries.
  • Recording before death in the correct county is required.
  • Professional guidance helps avoid costly mistakes.

FAQ

Can I add conditions or protections with a TOD deed?

No. Arizona law provides for an outright transfer. Use a trust if you need controls or creditor protections.

What if my beneficiary dies before me?

If you do not name an alternate, the property may need probate. Naming back up beneficiaries can also add complications to the process. Engage the services of an experienced Arizona estate planning attorney to give you the proper advice of how best to name contingent beneficiaries for your property.

Do beneficiaries take the property free of debt?

No. Mortgages and liens stay with the property. The beneficiary must pay, refinance, or sell to clear them.

Is recording required?

Yes. The deed must be recorded before death in the county where the property is located. See A.R.S. § 33-405 and the Maricopa County Recorder for local procedures.

Does a TOD deed replace a will or trust?

No. It only covers the real property listed. You still need a will and often a trust to cover personal property, incapacity planning, and complex family situations.

Internal & External Resources

Helpful links

External sources

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