What You Need to Know About Transfer on Death Deeds in Nebraska
If you’re a homeowner in Nebraska, you may have heard about using a Transfer on Death (TOD) deed to pass your home directly to a loved one after you die. On paper, it sounds ideal: no probate, no court process, just a simple transfer of property to the person you chose.
And in many cases, it works exactly like that. But it’s not always foolproof—and using a TOD deed without a broader estate plan can create more problems than it solves.
Let’s take a closer look at how TOD deeds work under Nebraska law, when they make sense, and the common pitfalls to avoid.
What Is a Transfer on Death Deed in Nebraska?
A Transfer on Death deed allows a homeowner to name a beneficiary who will inherit the property upon the owner’s death—without going through probate.
Under the Nebraska Uniform Real Property Transfer on Death Act (Neb. Rev. Stat. §§ 76-3401 to 76-3423), a properly executed TOD deed gives you full control over the property while you’re alive. You can still:
Live in it
Sell or refinance it
Change your mind and revoke the deed
Update your beneficiary designation at any time
When you die, the house automatically transfers to the named beneficiary—without probate.
The Benefits of a TOD Deed
Used correctly, TOD deeds can be:
Efficient – Assets transfer automatically upon death
Private – Unlike probate, there’s no public court record of the transfer
Flexible – You retain full ownership and control during your lifetime
Cost-effective – Avoiding probate can save time and legal fees
But TOD Deeds Aren’t a Silver Bullet
Despite their advantages, TOD deeds come with significant limitations and risks—especially if they’re used as a stand-alone solution without other planning.
1. Formatting and Recording Errors Can Invalidate the Deed
Your TOD deed must be properly drafted and recorded in the correct Nebraska county where the property is located. If there are errors—or if the deed isn’t filed before your death—the transfer may be invalid, and the house could end up in probate anyway.
2. TOD Deeds Don’t Override Legal Obligations
A TOD deed does not cancel out:
Mortgages or liens
Divorce settlements or spousal rights
Court-ordered judgments
Contracts affecting the property
Your beneficiary inherits the home subject to those existing obligations.
3. No Contingency Planning Built In
If the person you name as beneficiary dies before you and you haven’t named a backup (a “contingent beneficiary”), the deed fails. That means the house becomes part of your estate and may go through probate—undoing the very thing the TOD deed was meant to avoid.
This also applies if you name a minor or someone who is incapacitated. Nebraska doesn’t automatically create a trust or protective structure. Your loved one may need a court-appointed guardian or conservator to manage the property.
4. Insurance Coverage Can Become a Problem
Once you pass, your beneficiary becomes the legal owner. But if your homeowner’s insurance policy wasn’t updated, they might be unprotected.
There have been cases where insurance companies denied claims—such as in a fire—because the policy was still in the deceased’s name. Don’t assume your current coverage carries over. The new owner needs to get their own policy promptly.
5. You Might Still Owe Nebraska Inheritance Tax
Nebraska is one of the few states that still imposes an inheritance tax. While spouses and children are generally exempt, nieces, nephews, siblings, and non-relatives may owe between 1% and 18% of the home’s value depending on their classification.
A TOD deed doesn’t protect your beneficiary from this obligation.
6. Medicaid Estate Recovery Still Applies
If you received Medicaid benefits—especially for nursing home care—the state of Nebraska may seek reimbursement from your estate. Even with a TOD deed in place, your home may be subject to Medicaid estate recovery, depending on timing and other assets.
7. Family Conflict Can Still Happen
If your will divides everything equally among your children, but your TOD deed names only one child as the home’s beneficiary, the deed takes precedence. TOD property passes outside of probate—so it doesn’t follow the terms of your will.
This can cause confusion, resentment, or even litigation if your family didn’t know your intent.
8. Joint Ownership Can Override TOD Deeds
If you own your home in joint tenancy with right of survivorship, your co-owner’s survivorship rights come first. Your TOD deed won’t apply unless you outlive all other owners.
So if your spouse is still living after you pass, they inherit the property—not your TOD beneficiary.
When a TOD Deed Makes Sense
A TOD deed can be a smart option when:
Your estate is simple and mostly made up of your primary residence
You trust your named beneficiary to manage the property responsibly
You’ve had conversations about your wishes with loved ones
You’ve double-checked for any legal or tax complications
You’ve included backup beneficiaries or planned for special cases (minors, Medicaid, etc.)
But a TOD deed works best as part of a comprehensive estate plan, not a replacement for one.
Thinking About a TOD Deed in Nebraska?
If you’re considering using a TOD deed—or already have one in place—it’s worth reviewing the full picture. A quick solution can create long-term issues if it’s not part of a cohesive strategy.
Let’s talk about how this fits into your estate plan. Whether you’re trying to avoid probate, protect your loved ones from unexpected taxes or legal disputes, or just want peace of mind, I can help you make sure your plan actually works when it matters most.
Call me at 402-259-0059 or email zach@zandersonlaw.com.
FAQ: Transfer on Death Deeds in Nebraska
What is a Transfer on Death deed in Nebraska?
It’s a legal document that allows you to name a beneficiary to inherit your home upon your death—without going through probate.
Is a TOD deed better than a will?
Not necessarily. A TOD deed transfers only real estate and doesn’t include contingency planning. It should be used alongside, not instead of, a comprehensive estate plan.
Can I name more than one person on a TOD deed?
Yes, you can name multiple beneficiaries. You can also set percentages and designate contingent beneficiaries.
Does a TOD deed override my will?
Yes. The TOD deed takes legal precedence over your will for the property it applies to because it operates outside of probate.
Can I revoke a TOD deed after I record it?
Yes. As long as you’re still alive and have capacity, you can revoke or change your TOD deed at any time by filing a revocation or a new deed.
Will my beneficiary owe inheritance tax?
Possibly. Nebraska inheritance tax applies based on your relationship to the beneficiary. Spouses and children are exempt; others may owe taxes.
Is a TOD deed public record?
Yes. Once recorded, it becomes part of the public land records in the county where the property is located.
Does a TOD deed protect my house from Medicaid estate recovery?
No. Medicaid may still seek reimbursement from your estate, and a TOD deed does not prevent this.