Kentucky does not currently allow a transfer on death deed. There is no statute on the books that lets a property owner name a beneficiary directly on the deed and pass real estate outside probate at death. That could change: Senate Bill 34 would create a transfer on death deed under KRS Chapter 391, and it passed the Kentucky Senate 36–2 on March 12, 2026, before moving to the House Local Government Committee on March 24, 2026.1Kentucky Legislative Research Commission. 26RS SB 34 – An Act Relating to the Transfer of Property Upon Death Unless and until the House passes it and the governor signs it, Kentucky property owners have to use other tools to avoid probate on real estate.
Where the Kentucky TODD Bill Stands
This is not the first attempt. A draft bill circulated during the 2024 session proposed the same framework, based on the Uniform Real Property Transfer on Death Act, but never reached a final vote.2Kentucky Legislative Research Commission. An Act Relating to the Transfer of Property on Death SB 34 carries essentially the same structure into the 2026 session.
The bill would add new sections to KRS Chapter 391 and amend several existing statutes, including KRS 64.012 (county clerk fees), KRS 382.110 (deed recording requirements), and KRS 392.020 (surviving spouse rights).1Kentucky Legislative Research Commission. 26RS SB 34 – An Act Relating to the Transfer of Property Upon Death If enacted, it would apply to any transfer on death deed where the owner dies on or after the effective date, even if the deed was recorded earlier.3Kentucky Legislative Research Commission. 26RS SB 34 Original Bill Text – An Act Relating to the Transfer of Property Upon Death Owners who want to be ready can track the bill through the General Assembly’s website, but recording a document that Kentucky law doesn’t yet recognize accomplishes nothing.
What Kentucky Property Owners Can Do Right Now
Because the transfer on death deed is not yet an option in Kentucky, avoiding probate on real estate means choosing among three older tools. Each works, and each gives up something a TODD would preserve.
Revocable Living Trust
You create a trust during your lifetime, transfer the deed into the trust’s name, and name a successor trustee and beneficiaries. When you die, the successor trustee distributes the property outside probate. The trust remains revocable, so you can change beneficiaries or unwind it while you’re alive.
The tradeoff is cost and follow-through. Drafting a trust with an attorney typically runs several hundred to a few thousand dollars, and the trust only works if you actually re-title the property into it. A trust document sitting in a drawer while the deed is still in your personal name will not keep the house out of probate.
Joint Tenancy With Right of Survivorship
Adding a child or other person to the deed as a joint tenant with right of survivorship means the property passes automatically to the survivor when one owner dies. No probate, no deed to record after death beyond a death certificate.
The catch is that this is a present transfer of ownership. The moment you add a co-owner, that person has a real interest in the property. They can block a sale, and their creditors can reach the property. Adding a non-spouse can trigger gift tax reporting. And when you die, only your share of the property gets the stepped-up basis; the co-owner’s share keeps its original basis, which can matter a great deal when the property is later sold.
Life Estate Deed
You deed the property to a remainderman but keep a life estate, meaning you have the right to live in and use the property for the rest of your life. At your death the remainderman owns it outright, without probate.
A life estate deed is hard to reverse. Selling or mortgaging the property during your lifetime generally requires the remainderman’s cooperation, because they hold a vested future interest the day the deed is recorded.
A transfer on death deed, if Kentucky enacts one, would sidestep all three of these tradeoffs: no present ownership transfer, no need to fund a trust, full revocability, and the property passes outside probate.
What SB 34 Would Allow if It Becomes Law
The bill’s mechanics matter for anyone deciding whether to wait. A transfer on death deed under SB 34 would be recorded during your lifetime but have no effect on your ownership while you’re alive. You could sell, mortgage, or change the beneficiary at any time. The transfer would happen only at death, and only if the deed hadn’t been revoked.
Requirements the Deed Would Have to Meet
Several conditions would have to be satisfied for the deed to work. Missing any one of them could void it.
- You would need the same mental capacity required to make a will and would have to sign voluntarily.4Kentucky Legislative Research Commission. 26RS SB 34 – An Act Relating to the Transfer of Property Upon Death
- The deed would have to state explicitly that the property transfers to the named beneficiary at your death.2Kentucky Legislative Research Commission. An Act Relating to the Transfer of Property on Death
- The deed would have to be recorded with the county clerk in the county where the property sits before you die. A deed signed but never recorded would have no effect.2Kentucky Legislative Research Commission. An Act Relating to the Transfer of Property on Death
- For jointly owned property, every living joint owner would have to sign.2Kentucky Legislative Research Commission. An Act Relating to the Transfer of Property on Death
Existing Kentucky recording rules would still apply. Every deed recorded in Kentucky must include a source-of-title statement identifying how the current owner acquired the property, typically by referencing the book and page number of the prior deed.5Justia Law. Kentucky Code 382.110 – Recording of Deeds and Mortgages The deed must also be acknowledged before a notary public or county clerk before it can be admitted to record.6Kentucky Legislative Research Commission. Kentucky Revised Statutes 382.130 – When Deeds Executed in This State to Be Admitted to Record
How Joint Ownership Would Interact With the Deed
If one joint owner dies but other joint owners survive, the property would pass to the surviving joint owners by right of survivorship, and the TODD would not kick in. The deed would take effect only when the last surviving joint owner died.2Kentucky Legislative Research Commission. An Act Relating to the Transfer of Property on Death A married couple, for example, could record a TODD naming their children as beneficiaries, and the transfer would happen only after both spouses had passed.
Revocation
The proposed law would give owners four ways to revoke a recorded TODD:
- Recording a new TODD that either expressly revokes the earlier one or names different beneficiaries.
- Recording a standalone instrument of revocation.
- Recording a standard lifetime deed that expressly revokes the TODD.
- Selling or transferring the property to someone else during your lifetime, which nullifies the TODD automatically.2Kentucky Legislative Research Commission. An Act Relating to the Transfer of Property on Death
Every revocation would have to be notarized and recorded before the owner’s death. Tearing up the original signed copy would do nothing, because the recorded document in the county’s system controls. For jointly owned property, one owner’s revocation would affect only that owner’s interest; revoking the deed entirely would require all living joint owners to sign.2Kentucky Legislative Research Commission. An Act Relating to the Transfer of Property on Death
Creditors, Spouses, and Existing Liens
A TODD would not shield the property from the deceased owner’s debts. Under SB 34’s framework, if the probate estate doesn’t have enough assets to cover allowed claims, creditors can reach property transferred by a TODD. The liability attaches to the property, not to the beneficiary personally. Where multiple properties pass by one or more TODDs, the liability is split proportionally by net value.
SB 34 would also amend KRS 392.020, Kentucky’s surviving spouse statute.1Kentucky Legislative Research Commission. 26RS SB 34 – An Act Relating to the Transfer of Property Upon Death A surviving spouse’s elective share could potentially reach property transferred by a TODD. This is one of the more complex parts of the bill, and anyone with concerns about spousal claims should get advice from an estate planning attorney before recording.
Existing mortgages and other liens travel with the property. A beneficiary who receives a home through a TODD inherits whatever debt is secured by it. The lender keeps its lien, and the beneficiary has to keep paying, refinance, or sell.
Recording Costs
Kentucky’s current fee to record a deed of five pages or fewer is $33.00, plus $3.00 for each page beyond five and $4.00 for each additional reference to a related instrument. County clerks also collect a $10.00 permanent records storage fee, bringing the base cost for a standard-length deed to about $43.00.7Kentucky Legislative Research Commission. Kentucky Revised Statutes 64.012 – Fees of County Clerks SB 34 proposes amendments to KRS 64.012, so the fee structure could change if the bill passes. Notary fees are not capped in Kentucky; notaries set their own rates and only have to disclose the fee up front.
Kentucky also imposes a real estate transfer tax of $0.50 per $500 of value on most deed recordings.8Justia Law. Kentucky Code 142.050 – Real Estate Transfer Tax Whether it would apply to a TODD at recording is unsettled: no consideration changes hands and no ownership actually transfers when the deed is recorded, but the exemption list does not mention transfer on death deeds. Confirm the tax treatment with the county clerk or an attorney before recording.
Federal Tax Rules That Apply Either Way
Whether real estate passes through probate, a trust, or (eventually) a TODD, the federal tax treatment is the same, and two rules do most of the work.
Stepped-Up Basis at Death
When you inherit property, your tax basis resets to the property’s fair market value on the date of death. If a parent bought a house for $80,000 and it’s worth $300,000 when they die, your basis is $300,000. Sell it for $310,000 and you owe capital gains tax on the $10,000 gain, not on the $220,000 that accumulated during your parent’s life.9Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent This step-up applies to property that passes by TODD the same way it does to property inherited by will.
Lifetime gifts do not get this benefit. If your parent had deeded the house to you outright during their life, you would take their original $80,000 basis and owe capital gains on the full appreciation when you sell. That difference is why passing appreciated real estate at death, rather than as a gift, is usually the more tax-efficient move.
Federal Estate Tax
The federal estate tax exemption for 2026 is $15,000,000 per individual.10Internal Revenue Service. What’s New – Estate and Gift Tax Estates below that owe no federal estate tax. Kentucky also imposes an inheritance tax on some beneficiaries, but close family — spouses, children, grandchildren, parents, and siblings — are exempt.