A Transfer on Death Deed (TODD) lets you name a beneficiary to inherit real estate without going through probate. But if there’s a loan on the property (or security deed), it does not disappear when the owner dies. Here’s what you need to know:

1. The Mortgage Survives Death

The lender still has an interest the property and a right to be paid. The beneficiary takes ownership subject to that security deed.

2. The Beneficiary Must Pay to Keep the Property

The beneficiary is not personally liable for the loan unless they also signed the note. However, they must continue making payments, refinance, or pay it off if they want to keep the property. If payments stop, the lender may foreclose.

3. Due-on-Sale Clause

Normally, a transfer could trigger the 'due-on-sale' clause. But under federal law (the Garn–St. Germain Act), a transfer on death to a family member or joint tenant often does not trigger acceleration. You should confirm with the lender.

4. Effect on the Estate

The TODD avoids probate, but the security deed remains. The estate’s other creditors cannot eliminate the lender’s lien; the security deed has priority over other debts.