Transfer on Death Deed California: Avoid Probate Without a Trust
Quick Answer
A California Transfer on Death Deed (TOD deed) lets you pass real estate directly to a beneficiary when you die, without probate. It's a simpler alternative to a living trust for those who only want to avoid probate on their home. However, TOD deeds have significant limitations and aren't right for everyone.
California homeowners have heard the message: avoid probate. Probate is expensive ($46,000 in statutory attorney and executor fees on a $1 million estate) and time-consuming (often 12 to 18 months or longer). But what if you don't want the complexity of a living trust?
Enter the Transfer on Death Deed, a simpler way to pass your home to your loved ones without probate. But is it right for you? Let me explain how TOD deeds work and their important limitations.
Table of Contents
Not Sure Which Option is Right for You?
I can help you choose between a TOD deed and living trust. Questions? Call the attorney at (818) 337-4071.
Create Your Living Trust: $400Living Trust: $400 (single) or $500 (joint)
What is a Transfer on Death Deed?
A Transfer on Death Deed (also called a TOD deed or revocable transfer on death deed) is a legal document that transfers your California real estate to a named beneficiary upon your death. The key features are:
No Transfer During Lifetime
You keep full ownership and control of the property while you're alive. You can sell it, refinance it, or do anything else you want with it.
Revocable
You can change your mind and revoke the deed at any time before death. Simply record a revocation form with the county recorder.
Avoids Probate
The property passes directly to your beneficiary without court involvement. No probate fees and no probate court wait.
Simple and Inexpensive
Much cheaper and easier than creating a living trust. Preparation costs vary, plus the county recording fee, compared to $400+ for a trust.
California TOD Deed History
California authorized Transfer on Death Deeds in AB 139 (Stats. 2015, ch. 293), effective January 1, 2016. The law is not permanent: under current law it remains in effect only until January 1, 2032, unless a later statute extends it (Probate Code 5600).
How to Create a California TOD Deed
California has specific requirements for a valid Transfer on Death Deed:
Step 1: Use the Statutory Form
California Probate Code Section 5642 provides an official form that must be used or substantially followed. Using the wrong form can invalidate the deed entirely.
Step 2: Sign, Witness, and Notarize
The deed must be signed and dated by the property owner(s), signed by two witnesses who were present at the same time, and acknowledged before a notary (Probate Code 5624). The beneficiary does NOT need to sign, and they don't even need to know about it.
Step 3: Record Within 60 Days
This is critical: the deed must be recorded with the county recorder's office within 60 days after it was notarized (Probate Code 5626). A TOD deed that is not recorded in time is not effective.
Step 4: Owner Must Have Capacity
The property owner must be mentally competent when signing. If capacity is questionable, the deed could be challenged later.
Critical: 60-Day Recording Requirement
If you don't record your TOD deed within 60 days after it was notarized, it's completely invalid. The property will go through probate. This is one of the most common TOD deed mistakes.
TOD Deed vs Living Trust: Key Differences
| Factor | TOD Deed | Living Trust |
|---|---|---|
| Cost | Preparation costs vary, plus the county recording fee (we do not prepare TOD deeds) | $400 (single) or $500 (joint) |
| What It Covers | Only one property per deed | Multiple properties and all other assets |
| Incapacity Protection | None, only takes effect at death | Successor trustee manages assets if incapacitated |
| Multiple Beneficiaries | Can name multiple, but can't specify unequal shares | Complete flexibility in division and distribution |
| Conditions on Inheritance | Not possible | Can include age requirements, conditions, etc. |
| Privacy | Deed is public record | Trust remains private |
| Creditor Protection | Property subject to your creditors | Some protection possible with irrevocable trusts |
Limitations of Transfer on Death Deeds
TOD deeds have significant limitations you should understand before deciding:
Only for Real Estate
A TOD deed only covers the specific property in the deed. Bank accounts, investments, vehicles, and other assets still go through probate unless you have additional planning (like POD accounts or a living trust).
Subject to Creditors
Unlike assets in some trusts, property transferred by TOD deed remains subject to the deceased's creditors. If you owe money when you die, creditors can still make claims against the property.
Medi-Cal Recovery
For deaths on or after January 1, 2017, Medi-Cal estate recovery reaches only assets in the probate estate. Property that passes by a TOD deed is outside it, the same as property held in a living trust (Welfare and Institutions Code 14009.5).
Property Tax Reassessment Risk
Transfer by TOD deed may trigger property tax reassessment unless an exclusion applies (such as parent-to-child transfer under Proposition 19). This could dramatically increase property taxes for your beneficiary.
Potential Conflicts
If your TOD deed conflicts with your will or trust, it can create legal complications. The TOD deed generally controls for that property, which may not match your overall estate plan.
No Incapacity Protection
A TOD deed does nothing if you become incapacitated. Your family may still need a conservatorship to manage your property, an expensive court process. A living trust avoids this entirely.
When a TOD Deed Makes Sense
A Transfer on Death Deed may be right for you if:
Simple Situation
You have one property and want a simple, inexpensive way to avoid probate on that property specifically.
Straightforward Beneficiaries
You want to leave the property to one person (or equal shares to multiple people) without conditions or special instructions.
No Incapacity Concerns
You don't need incapacity planning: perhaps you're younger and healthy, or you have other arrangements in place.
Other Assets Are Covered
Your other assets are small enough to avoid probate ($208,850 threshold in California) or pass by other means (POD accounts, joint ownership, etc.).
Good Candidate for TOD Deed
A 65-year-old widow owns her home (worth $600,000) and has $150,000 in bank accounts set up as POD to her son. She wants to leave everything to her son. A TOD deed for the house plus the existing POD accounts means her entire estate avoids probate without the cost of a living trust.
When a Living Trust is Better
A living trust is usually the better choice if:
- You own multiple properties: a trust covers everything in one document
- You have significant assets beyond real estate: investments, business interests, etc.
- You want protection if you become incapacitated: successor trustee takes over seamlessly
- You want to control how and when beneficiaries receive their inheritance: age requirements, conditions, staggered distributions
- You have a blended family: complex beneficiary situations need trust flexibility
- Privacy matters: trust administration is private. TOD deeds are public record
The Hidden Cost of "Cheap" Planning
A TOD deed is cheaper upfront, but consider the full picture. If your other assets exceed $208,850, your family still faces probate for everything else. If you become incapacitated, they may need a conservatorship. Sometimes a $400 trust is actually the cheaper option.
Need Help Choosing the Right Option?
I can help you determine whether a TOD deed, living trust, or combination is right for your situation. Every family is different, and the right estate plan depends on your specific circumstances.
Frequently Asked Questions
Can I use a TOD deed if I have a mortgage?
Yes. A TOD deed works with mortgaged property. The mortgage stays with the property: your beneficiary inherits both the house and the mortgage obligation. For a home with fewer than five units, federal law (the Garn-St Germain Act, 12 U.S.C. §1701j-3(d)) generally bars the lender from enforcing the due-on-sale clause on a transfer to a relative at the borrower's death.
What if my beneficiary dies before me?
If your named beneficiary dies before you and you haven't updated the TOD deed, the deed becomes ineffective for that beneficiary. If you named multiple beneficiaries, their share typically goes to the surviving beneficiaries. If the sole beneficiary predeceases you, the property goes through probate.
Can I name multiple beneficiaries?
Yes, you can name multiple beneficiaries on a TOD deed. However, they must receive equal shares: you cannot specify that one person gets 60% and another gets 40%. For unequal distributions, you need a living trust.
Can I revoke a TOD deed?
Yes. You can revoke a TOD deed at any time by recording a revocation form with the county recorder. You can also revoke it by recording a new TOD deed naming different beneficiaries, or by selling or transferring the property during your lifetime.
Does a TOD deed affect my property taxes now?
No. Recording a TOD deed does not trigger property tax reassessment during your lifetime because no transfer actually occurs until you die. The reassessment question only arises when the property transfers to your beneficiary upon death.
What happens if I sell the property after recording a TOD deed?
If you sell or transfer the property during your lifetime, the TOD deed becomes meaningless. There's no property to transfer at death. You don't need to formally revoke the deed, though it's cleaner to do so.
Can creditors take property transferred by TOD deed?
Yes. Unlike some trust arrangements, property transferred by TOD deed remains subject to the deceased's debts. Creditors have up to one year after death to make claims against the property.
Affordable Estate Planning Options
Choose the right level of protection for your family.
Rozsa Gyene, Esq.: California State Bar #208356
25+ Years of California Estate Planning Experience
Phone: (818) 337-4071
Office: 3500 W. Olive Ave., Suite 300, Burbank, CA 91505
Protect your home from probate
Whether TOD deed or living trust, I can help you choose.
Schedule Your ConsultationKey Takeaways: Transfer on Death Deed California
- A TOD deed transfers real estate at death, without probate, and you keep full control during lifetime
- Must be recorded within 60 days after it was notarized, or it's invalid
- Preparation costs vary, plus the county recording fee, compared to $400+ for a living trust
- Only covers one property: other assets may still require probate
- No incapacity protection: only takes effect at death
- Subject to creditors, unlike some trust arrangements
- Best for simple situations: one property, straightforward beneficiaries, no complex needs
- Living trust is better for multiple properties, incapacity protection, or complex families
