What You Need to Know About Transfer on Death Deeds in Nebraska

If you’re a homeowner in Nebraska and you’ve been thinking about how to make things easier for your loved ones after you’re gone, you may have come across something called a Transfer on Death deed—or TOD deed. On the surface, it looks like a gift from the legal gods: you name someone to receive your house when you die, file a form with the county, and that’s it. The house bypasses probate and goes straight to the person you chose.

And in a lot of ways, that’s true. But simple doesn’t always mean foolproof—and a single form isn’t a replacement for a real plan.

Let’s start with what a TOD deed does well. Under Nebraska’s Uniform Real Property Transfer on Death Act (Neb. Rev. Stat. §§ 76-3401 to 76-3423), you can file a TOD deed with your county’s register of deeds. As the owner, you keep full control of the property. You can still live in it, sell it, refinance it, revoke the deed, or even change your mind and name a different beneficiary. Then, when you pass away, your home transfers automatically to that person—no probate, no court hearings, no waiting.

That said, there are some key limitations that often get overlooked.

For starters, your deed has to be properly formatted and recorded in the right county to even be valid. A mistake in how it’s drafted or a failure to file it can make the whole thing meaningless. It also doesn’t override existing legal obligations. So if your house is subject to a contract, divorce decree, lien, or other restriction, the TOD deed doesn’t magically erase that.

It’s also important to know that TOD deeds don’t include any kind of contingency planning unless you build it in. What happens if the person you named dies before you do? If there’s no backup (called a “contingent beneficiary”), the transfer fails—and your house might go back into your estate and through probate anyway. Same goes if you name someone who is under 19 or isn’t capable of managing the property. Nebraska doesn’t automatically create a trust or protective mechanism in those cases. A minor or incapacitated beneficiary could require a court-appointed guardian or conservator to manage the property on their behalf—which can be expensive, time-consuming, and exactly what you were trying to avoid.

Then there’s the insurance angle. Let’s say the house passes by TOD, but no one updated the homeowners policy. There was a widely shared story recently in the Wall Street Journal about a man in another state who left his house to his niece using a TOD deed. After he passed, the home was destroyed in a fire. The insurance claim was denied because the policy was still in the deceased’s name. While laws and outcomes vary by state, the principle applies here too: once you’re gone, your beneficiary becomes the legal owner—and they need to be on the insurance, or they might be out of luck when something goes wrong.

Also worth noting: just because you avoid probate doesn’t mean you avoid taxes. Nebraska still has a state inheritance tax, and a TOD deed doesn’t exempt your beneficiary from it. The amount depends on your relationship to the person. Spouses and kids? No tax. But nieces, nephews, siblings, and unrelated beneficiaries might owe anywhere from 1% to 18% of the property’s value, depending on how they’re classified under Nebraska law.

Medicaid recovery is another blind spot. If you received Medicaid benefits before passing—particularly for long-term care—the state may place a claim on your estate to recover those costs. A TOD deed doesn’t shield your home from that. In some cases, it may actually accelerate the timeline for the state to step in, especially if the house was the only remaining asset.

Then there’s the emotional piece. One of the most common estate planning pitfalls I see is assuming that your family “just knows” what you wanted. If your will divides everything equally among your kids, but your TOD deed names just one of them as the beneficiary of your house, the deed takes precedence. TOD deeds transfer property outside of probate, meaning they’re not governed by your will. That can cause tension, confusion, and sometimes a full-on court fight—especially if there was no conversation or explanation before you passed.

Lastly, joint ownership can complicate things. If you own your home jointly with someone—say, a spouse in joint tenancy with right of survivorship—your TOD deed doesn’t take effect until you’re the last surviving owner. The survivorship rights of the co-owner come first. Only once the property is entirely in your name does the TOD deed control what happens next.

So where does that leave us?

TOD deeds can be a smart move—but only when used as part of a bigger strategy. They work best when your estate is relatively simple, your wishes are clear, and you’ve talked through the details with your family (or at least your lawyer). But they can’t replace an estate plan. They don’t address every scenario. And they definitely don’t guarantee that what you meant to happen will actually happen.

If you’re thinking about naming someone on a TOD deed—or if you’ve already done it and want to make sure everything still lines up—I’d be happy to walk through the pros and cons with you. Sometimes the right answer is yes, this is exactly what you need. Other times, it’s worth slowing down and taking a more comprehensive look at your full plan.

Because passing on your home shouldn’t create confusion, legal problems, or a tax bill your loved ones didn’t see coming. It should be clear. Thoughtful. And something that genuinely helps the people you care about most.

Contact me at 402-259-0059 or zach@zandersonlaw.com.