California Transfer-on-Death (Beneficiary) Deed

California Transfer-on-Death (Beneficiary) Deed

Avoid probate and pass on your California real estate with a simple transfer-on-death deed

Use this form to leave your California real estate without probate. You retain ownership, responsibility, and control over the property during your life. After your death, ownership transfers to the beneficiary you name. We take you through all the steps, including:

  • naming your beneficiaries
  • writing a description of the property
  • checking over your completed deed, and
  • signing the deed and having it notarized.

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If you own certain types of real estate in California and want to make sure that it passes to your heirs without the hassle of probate court, you can use Nolo's transfer-on-death (TOD) deed. This deed transfers ownership of your property just like a regular deed you might use to transfer real estate, but with a crucial difference: It doesn't take effect until after your death.

In California, you may transfer any of the following types of real estate with a TOD deed:

  • property that contains one to four residential units
  • a condominium unit, or
  • a parcel of agricultural land of 40 or fewer acres that includes a single-family residence.

It's easy to make a TOD deed.  You'll simply complete the following steps:

  • fill in information about you and the property
  • name your beneficiaries
  • review the completed deed
  • sign the deed and have it notarized, and
  • record the deed at the recorder's office in the county where the property is located, within 60 days after signing the deed.

Take care of your beneficiaries and help them to avoid probate with this plain-English eForm from Nolo.

FAQs


How does a TOD deed work?

The process. You must sign the deed and get your signature notarized, and then record (file) the deed with the county clerk's office within 60 days after signing it. Otherwise, it won't be valid.

The beneficiary's rights. The person you name in the TOD deed to inherit the property has no legal right to it until your death. The beneficiary doesn't have to sign or acknowledge the deed. Of course, it's a good idea to let the beneficiary know that you've recorded a TOD deed. Otherwise he or she might not know about it, even after your death.

Earlier wills. If you have previously made a will, or a TOD deed, that leaves the property to someone, your new TOD deed will override the earlier document.

Your rights. You keep complete ownership of and control over the property while you're alive. You pay the taxes on it, and it's not protected from your creditors. You can sell it, give it away, or mortgage it. Because you're not giving it away now, there's no federal gift tax.

Revoking the deed. Later, if you change your mind about who you want to inherit the property, you are not locked in. You can give or sell the property to someone else, transfer the property to a trust, record a revocation, or record another TOD deed, leaving the property to someone else. You cannot use your will to revoke a TOD deed. 

How ownership is transferred. At your death, ownership passes automatically to the beneficiary you named in the deed. Any mortgage or debt attached to the land goes along with it. To retitle the real estate in the new owner's name, the new owner should record a sworn statement (affidavit) and a copy of the death certificate. The process is simpler and quicker than probate.

Liability for debts after your death. If, after your death, there isn't enough money in your estate to pay your debts, creditors have up to four months to bring a court proceeding to seek payment from any real estate transferred by a TOD deed. As a practical matter, that means the new owner may not be able to sell the property until the time for creditor's claims has passed.


What kinds of property can you transfer with a TOD deed?

You may transfer any of the following types of California real estate with a TOD deed:

  • property that contains one to four residential units
  • a condominium unit, or
  • a parcel of agricultural land of 40 or fewer acres that includes a single-family residence.

What are the rules for co-owned property?

If you own the property with someone else, how the TOD deed works depends on how you and the other co-owners hold title to the property. If you don't know how you hold title, start by looking at the deed that transferred the property to you. It might say, for example, "to Joanne Hayden and Edward M. Hayden, as joint tenants." If you're not sure how you co-own the property, consult a lawyer.

Tenancy in common. If your deed doesn't state how you own the property, you and your co-owners are presumed to own it as tenants in common unless you've agreed otherwise in writing. As a tenant in common, you can leave your interest to someone by signing a TOD deed alone. Only your interest in the property will be transferred to the beneficiary when you die. For example, if you own a house with your brother as tenants in common, you can sign a TOD deed that leaves your half-interest to your daughter. At your death, your daughter will become a tenant in common with your brother.

Joint tenancy or community property with right of survivorship. In California, only one property owner may sign a TOD deed. If you create a TOD deed for real estate that you own in joint tenancy or as community property with right of survivorship, and you are the first co-owner to die, the TOD deed will be void. Only if you are the last co-owner to die will the TOD deed take effect, transferring the property to the beneficiary you name.

A TOD deed will not transfer a co-owner's share of the property. If a co-owner wants to name a TOD beneficiary, they must complete and record a separate deed.

Trust property. If you hold real estate in a trust, you probably won't need to use a TOD deed, because trust property doesn't need to go through probate anyway. If for some reason you want to use a TOD deed instead, talk to a lawyer about your estate plan first.


What do I need to know about naming beneficiaries?

You can name anyone you please to inherit your real estate -- a person, more than one person, or an organization such as a favorite charity.

More than one beneficiary. If you name more than one person, think carefully about how they will feel about owning the property together. Co-ownership is cumbersome and often causes tension. For example, one co-owner could force a sale of the property even if the other co-owners didn't want to sell.

If a beneficiary dies before you do. If you name more than one primary beneficiary, and one of them doesn't survive you, the surviving primary beneficiary(ies) will inherit the property. 

Children under age 18. Think twice about naming a child under age 18 as a beneficiary. A child can take title to the property, but an adult will need to manage it. You may have several options for naming an adult to manage the property, including:

  • using your will to name a property guardian who will take care of any property you leave to your own young children, including property transferred by this deed
  • setting up a trust for a child and naming the trust as the TOD beneficiary, or
  • naming an adult under the California Uniform Transfers to Minors Act, which lets you name a "custodian" to manage the property until the child reaches an age from 21 to 25, at which time the beneficiary would own the real estate outright.

For more information, see Nolo's article Leaving an Inheritance for Children. If you need help setting up a property management method for a young beneficiary, consult a qualified estate planning lawyer.

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