TOD Deed vs Adding Your Child to the Deed: One Is a Gift

Guides › Transfer-on-Death Deeds

Updated July 31, 2026. Quick answer: adding a child to your deed as joint tenant — the folk remedy for probate — is an immediate gift of half your house. A TOD deed achieves the same probate avoidance while giving away nothing: you keep full ownership, full control, and full revocability until death. The joint-tenancy version costs real money three separate ways.

The three costs of the folk remedy

1. Half the step-up dies. Property passing at death takes a fresh, date-of-death basis (IRC §1014). The half you GIFTED carries your old basis instead (§1015). On a house bought for $80,000 and worth $500,000, the child who inherited via TOD deed sells with essentially no gain; the joint-tenant child carries a low basis on their gifted half and can owe capital-gains tax on roughly $210,000 of appreciation the family volunteered for.

2. Their problems become the house’s problems. A joint tenant’s creditors, bankruptcy, lawsuit or divorce can reach their interest in YOUR home while you are alive. A TOD beneficiary has nothing to reach — no interest exists until death.

3. You need their signature. Selling or refinancing now requires your co-owner’s cooperation — and their spouse’s, in some states. Revoking a TOD deed requires only recording a new one.

Joint tenancy still wins in one narrow lane: spouses, where survivorship between co-owners who already share everything is exactly the point. For the parent-to-child transfer, the deed comparison is not close. The full tax picture: TOD deed taxes · what the inherited-basis rules are worth in dollars: the inherited home sale capital gains guide.