Your home is one of your most valuable assets, and deciding how to pass it on is an important part of estate planning. In California, a transfer-on-death (TOD) deed offers a way to leave real estate to a beneficiary without the hassle of probate. This legal document allows you to maintain full ownership while you’re alive, then automatically transfers the property upon your passing. For many homeowners, a TOD deed provides a simple, cost-effective way to ensure their property goes directly to their intended recipient.
How a Transfer-on-Death Deed Works in California
A transfer-on-death deed allows you to name a beneficiary who will inherit your real estate when you pass away—without going through probate. Until that time, you retain full control of the property. You can live in it, sell it, refinance it, or even revoke the deed if your circumstances change.
To create a TOD deed, you must complete a legally valid form, sign it before a notary and two witnesses, and file it with the county recorder’s office within 60 days of signing. The deed remains inactive until your death. At that point, your beneficiary must record an affidavit and a certified copy of your death certificate to transfer ownership.
This option is available for certain types of real estate, including single-family homes, condos, and some multi-unit properties. If the deed is not properly recorded, or if the beneficiary predeceases you without a backup, the property may still be subject to probate.
Advantages of Using a Transfer-on-Death Deed
A transfer-on-death deed offers a straightforward way to pass real estate to a beneficiary while avoiding probate. It provides several benefits for California homeowners who want to keep the process simple and cost-effective.
- Avoids probate – The property transfers directly to the beneficiary without the delays and expenses of probate court.
- Maintains control – You keep full ownership of your property during your lifetime, with the ability to sell, refinance, or revoke the deed.
- Simple and affordable – Unlike a trust, a TOD deed requires no ongoing management or legal fees after recording.
- Clear beneficiary designation – Naming a beneficiary reduces confusion and potential disputes among heirs.
- Ideal for sole owners – If you own property individually and want a direct transfer, a TOD deed offers a convenient solution.
For many homeowners, a TOD deed provides an effective way to ensure their property passes smoothly to their intended recipient.
Potential Drawbacks and Risks
While a transfer-on-death deed can be a useful estate planning tool, it’s not the right choice for everyone. There are potential risks and limitations to consider before deciding if it fits your situation.
- Limited flexibility – A TOD deed only applies to real estate and does not cover other assets like bank accounts or investments.
- Debt responsibility – If the property has an outstanding mortgage or liens, the beneficiary inherits these obligations.
- Possible disputes – If multiple beneficiaries are named, disagreements may arise over selling or managing the property.
- No protections for minors or special needs beneficiaries – If a beneficiary is underage or requires long-term financial oversight, a trust may be a better option.
- Risk of probate if not properly structured – If the beneficiary predeceases you and no alternate is named, the property may still go through probate.
Carefully evaluating these factors can help ensure your estate plan aligns with your goals.
When a TOD Deed Might Be a Good Option
A transfer-on-death deed works well in certain situations, especially for homeowners looking for a simple way to pass real estate to a beneficiary.
- Single homeowner – A widowed parent wants their house to go directly to their adult child without probate delays.
- Retiree without a trust – A homeowner with no complex assets wants to leave their home to a sibling. A TOD deed avoids the need for a trust.
- Blended family – A parent in a second marriage wants to ensure their child from a previous relationship inherits the property.
These scenarios highlight how a TOD deed can simplify estate planning.
Is a TOD Deed Right for You?
A transfer-on-death deed can be a practical way to pass real estate to a beneficiary without probate, but it isn’t the right choice for everyone. If you have multiple heirs, complex assets, or specific wishes, other estate planning tools may offer better protection. At OC Wills & Trust Attorneys, we can help you determine the best approach for your needs. Contact us today to discuss your options and create a plan that works for you.
