I have found my solution...I think on how to handle the transfer of rental property upon my death.

A little background, I live in a state with very HIGH transfer cost, so purchasing something in one name and then moving it into a trust would be over $10,000 per house, so not what I want to do.

I have found the federal law:

The Inheritor’s Rights

Someone who inherits real estate that’s subject to a mortgage generally inherits the mortgage as well. The new owner can simply take over the old mortgage, without any change in terms. This is possible because of a federal law known as the Garn-St. Germain Depository Institutions Act of 1982. (12 U.S.C. section 1701J-3)

The Act sets out several situations in which lenders cannot enforce "due-on-sale" clauses in mortgages. These provisions (also called acceleration clauses) allow lenders to demand that a mortgage be paid off in its entirety when property is sold. But under the Garn-St. Germain Act, the lender cannot demand that the mortgage be paid off when the transfer is:

because of the death of a joint tenant or tenant by the entirety, or

to a relative resulting from the death of a borrower.

The law applies to residential property that has four or fewer dwelling units, including a residential manufactured home. It also applies to a lien on the stock allocated to a unit in a cooperative housing corporation.

The Inheritor’s Options

If the law covers the inherited property, the new owner can keep making the payments, under the existing terms of the mortgage. This can be a good deal if the new owner can afford the payments; the new owner doesn’t have to reapply for a mortgage, with all the hassle and expense that process entails.

What If The Beneficiary Can't Afford The Property?

A new owner who can’t afford to keep up the mortgage (and all the other expenses of home ownership, including property taxes, repairs, and maintenance) must consider another strategy, like any other homeowner in that situation. If an affordable refinance isn’t available, or if the new owner doesn’t want to live in the house or rent it out, selling it may be the way to go. If the property is sold within a year after the death of the former owner, the inheritor probably won’t owe any capital gains tax.