California Transfer on Death Deeds

A transfer on death (TOD) deed is like a regular deed you might use to transfer your California real estate, but with a crucial difference: It doesn't take effect until your death. At your death, the real estate goes automatically to t­­he person you named to inherit it (your "beneficiary"), without the need for probate court proceedings. (Cal. Prob. Code §§ 5600 to 5696.)

You must (1) sign the deed, (2) have two adults who are not beneficiaries witness your signing of the deed, (3) have your signature notarized, and (4) record (file) the deed with the county clerk's office within 60 days of having it notarized. Otherwise, the TOD deed won't be valid.

You can make a California transfer on death deed with WillMaker.

How the TOD Deed Works

The beneficiary's rights. The person you name in the deed to inherit the property doesn't have any legal right to it until your death. (More on this below.) The beneficiary doesn't sign the deed, but it's a good idea to let the beneficiary know you've recorded it. Otherwise, he or she might not know about it, even after your death.

Earlier wills or TOD deeds. If you have made a will or previous TOD deed that leaves the property to someone, your new TOD deed will override it.

Your rights. You keep complete ownership of, and control over, the real estate 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 making a gift of the property, there's no federal gift tax.

Effect of divorce. If you named your spouse as a beneficiary of your TOD deed, and later get divorced, that beneficiary designation is automatically revoked.

Medi-Cal. In California, creating a TOD deed won't affect whether or not you are eligible for Medi-Cal. Because you own the property and are not actually giving it away during your lifetime, a TOD deed won't help you "spend down" your assets to help you qualify for Medi-Cal. Beware, though, that if you do end up receiving Medi-Cal benefits—for example, to pay for nursing home care—your home might be liable for reimbursement of Medi-Cal expenditures. If you have questions, consult a local attorney.

Other creditor claims. Your TOD beneficiary may be liable for the claims of your creditors, up to the value of the property they receive from you.

Revoking the deed. If you later change your mind about who you want to inherit the property, you are not locked in. You have two options: (1) complete, have witnessed and notarized, and record a revocation or (2) complete, have witnessed and notarized, and record another TOD deed, leaving the property to someone else. You cannot use your will to revoke or override a TOD deed.

How ownership is transferred. To get title to the property after your death, the beneficiary must:

1. Record a certified copy of the death certificate in the county clerk's office.
2. File a Change in Ownership statement. Your beneficiary can obtain this form from the county assessor in the county where the real estate is located.
3. Send notice to your heirs, along with a copy of this deed and your death certificate. Sample language for this notice is set out in Prob. Code § 5681(b).
4. Record an affidavit stating that notice was sent to your heirs. This affidavit can simply state, "I, [name of beneficiary], served the notice required by Probate Code Section 5681." (Cal. Prob. Code § 5682 (c).)

If you ended up receiving Medi-Cal benefits, your beneficiary must also notify the State Department of Health Care Services and provide a copy of your death certificate. If you named multiple beneficiaries in your TOD deed, it's sufficient for just one beneficiary to complete the steps listed above.

While the beneficiary must take these extra steps to get title to the property, the property will avoid probate, which is often time-consuming and costly.

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 creditors' claims has passed.

Use Nolo's Quicken WillMaker to make a transfer on death deed in any state that allows it. You can also use WillMaker to create other estate planning documents, such as a will, health care directive, power of attorney, and more.

Property You Can 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.

Note that you may not transfer:

• non-residential property
• a unit in a stock cooperative
• a parcel of agricultural land that is over 40 acres in size
• a mobile home, unless the mobile home is considered a "fixture" or improvement under Section 18551 of the Health and Safety Code.

Special Rules for Co-Owned Property

In California, even if you co-own a property, you cannot create a TOD deed together with your co-owners. If more than one co-owner wants to name a TOD beneficiary, they must each complete and record a separate deed. Each co-owner's TOD deed will transfer only that co-owner's share of the property.

Moreover, 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."

There are a few common ways to co-own property in California:

Joint tenancy (also called "joint tenancy with right of survivorship"). If you co-own real estate as joint tenants with right of survivorship, when one co-owner dies, that co-owner's share of the property will automatically go to the surviving co-owners. When you make a TOD deed on your own (as is required in California), without the other joint tenants, the deed will be effective only if you are the last surviving owner of the property. If you die first, the surviving co-owners will own the property, and the TOD deed won't have any effect.

Example: Claire and Kendra co-own their home as joint tenants. Claire makes a TOD deed for her share of the property and names Oscar as the beneficiary. However, Claire dies before Kendra. Kendra becomes the sole owner of the entire home, and she is free to sell the home or leave it to anyone she wishes.

If you and your co-owner want the property to go to the same beneficiary after you both have died, you can make separate TOD deeds that name the same beneficiary.

Example: Inez and Alex co-own their home as joint tenants and wish to leave the home to their son Benji after both of them have passed away. Inez makes a TOD deed for her share of the property and names Benji as the beneficiary. Alex makes a separate TOD deed for his share of the property and names Benji as the beneficiary as well. When either Inez or Alex dies, the other will become the sole owner of the entire home. After that surviving owner dies, the home goes to Benji under the last surviving owner's TOD deed.

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. If you own your property as a tenant in common and create a TOD deed, that TOD deed will transfer your share of the property to the TOD beneficiary when you die.

Example: Raymond and Jack, who are brothers, own a house together as tenants in common. Raymond signs a TOD deed that leaves his half-interest to his daughter. At Raymond's death, his daughter will become a tenant in common with Jack.

Community property. California real estate acquired by a married person is generally the couple's community property. Community property can be owned with or without a "right of survivorship." Again, look at your deed to find out how you co-own the property. If it says "community property with right of survivorship," then your TOD deed will work the same way it does for a joint tenancy with right of survivorship (see above).

If you're not sure how you co-own the property or whether or not your spouse has any rights to it, consult a lawyer. While the guidance here fits most situations, if you have a complicated situation or more complex aims, you should turn to a lawyer for a more tailored solution.

Note on 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.

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. But if you want to name more than one person, or a minor, there are some issues you should consider.

More than one beneficiary. Before you name multiple beneficiaries on your transfer on death deed, make sure you consider 1) how the co-beneficiaries will hold title to the property after you die, 2) what will happen if one of the co-beneficiaries dies before you do, and 3) how the beneficiaries will feel about co-owning the property.

As to the first issue, when you make WillMaker's transfer on death deed for California, your property will transfer to your beneficiaries in equal shares with no right of survivorship. This is the default under California law. In other words, your beneficiaries will own your property as tenants in common and each beneficiary will be free to leave his or her share to someone else or to sell that share of the property.

Example: You name Tim, Stephanie, and Rebekah as your TOD beneficiaries. After you die, they will own the property as tenants in common. Tim leaves his one-third share of the property to his son Cameron in his will. Stephanie sells her one-third share of the property to Anya. After Tim dies, Cameron, Anya, and Rebekah own the property.

As to the second issue, if one or more of the beneficiaries dies before you do, their share or shares of the property will be transferred to the surviving beneficiaries.

Example: You name Tim, Stephanie, and Rebekah as your TOD beneficiaries. Tim dies before you do. Stephanie and Rebekah would each inherit half the property. They would own it as tenants in common, and are each free to sell or leave their half of the property to someone else.

Finally, think carefully about how your beneficiaries 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.

Children under 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.

When making a TOD deed with WillMaker, you can name an adult "custodian" under the California Uniform Transfers to Minors Act UTMA) to manage the property. Under California's UTMA, the beneficiary becomes the outright owner of the property at an age between 18 and 25.

You may have other options for naming an adult property manager, 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, and
• setting up a trust for a child and naming the trust as the TOD beneficiary.

For more information, see Naming a Minor Beneficiary for Transfer on Death Deeds. For help setting up a property management method, consult a qualified estate planning lawyer.

Sample Legal Descriptions

Several kinds of legal descriptions are used in California. Just copy what's on the previous deed that transferred the property to you. Here are two examples:

• Lot 13, Block 24, as shown on that certain map entitled, "TRACT NO. 917 WESTBOROUGH UNIT NO. 8, SAN MATEO COUNTY, CALIFORNIA", which map was filed in the Office of the Recorder of the County of San Mateo, State of California, on November 24, 1963 in Book 54 of maps at pages 17 and 18.
• Unit No. 2807, as shown on that certain plan entitled, "Condominium Plan, One Marina – Phase 20, Redwood City, San Mateo County, California," attached as of that "Declaration of Annexation for One Marina, a condominium project Phase 20 and condominium plan for One Marina – Phase 20," which was filed for record in the Office of the Recorder of the County of San Mateo, State of California, on April 22, 2015 under Serial No. 2015-040048, official records.

­If the legal description is too long to safely type out (they can even run several pages long), simply photocopy or scan and print it, and attach it to the transfer on death deed as "Exhibit A."

Common Questions About California Transfer on Death Deeds

The following Q&A is written by the California legislature. Read it carefully before creating your TOD deed in California.

WHAT DOES THE TOD DEED DO? When you die, the identified property will transfer to your named beneficiary without probate. The TOD deed has no effect until you die. You can revoke it at any time.

CAN I USE THIS DEED TO TRANSFER NONRESIDENTIAL PROPERTY? No. This deed can only be used to transfer residential property. Also, the deed cannot be used to transfer a unit in a stock cooperative or a parcel of agricultural land that is over 40 acres in size.

CAN I USE THIS DEED TO TRANSFER A MOBILEHOME? The deed can only be used to transfer a mobilehome if it is a "fixture" or improvement under Section 18551 of the Health and Safety Code. If you are unsure whether your mobilehome is a fixture, you may wish to consult an attorney. An error on this point could cause the transfer of your mobilehome to fail.

HOW DO I USE THE TOD DEED? Complete this form. Have it signed by two persons who are both present at the same time and who witness you either signing the form or acknowledging the form. Then NOTARIZE your signature (witness signatures do not need to be notarized). RECORD the form in the county where the property is located. The form MUST be recorded on or before 60 days after the date you notarize it or the deed has no effect.

IF I AM UNABLE TO SIGN THE DEED, MAY I ASK SOMEONE ELSE TO SIGN MY NAME FOR ME? Yes. However, if the person who signs for you would benefit from the transfer of your property, there is a chance that the transfer under this deed will fail. You may wish to consult an attorney before taking that step.

CAN A PERSON WHO SIGNS THE DEED AS A WITNESS ALSO BE A BENEFICIARY? Yes, but this can cause serious legal problems, including the possible invalidation of the deed. You should avoid using a beneficiary as a witness.

IS THE "LEGAL DESCRIPTION" OF THE PROPERTY NECESSARY? Yes.

HOW DO I FIND THE "LEGAL DESCRIPTION" OF THE PROPERTY? This information may be on the deed you received when you became an owner of the property. This information may also be available in the office of the county recorder for the county where the property is located. If you are not absolutely sure, consult an attorney.

HOW DO I "RECORD" THE DEED? Take the completed and notarized deed to the county recorder for the county in which the property is located. Follow the instructions given by the county recorder to make the deed part of the official property records.

WHAT IF I SHARE OWNERSHIP OF THE PROPERTY? This deed only transfers YOUR share of the property. If a co-owner also wants to name a TOD beneficiary, that co-owner must complete and RECORD a separate form.

CAN I REVOKE THE TOD DEED IF I CHANGE MY MIND? Yes. You may revoke the TOD deed at any time. No one, including your beneficiary, can prevent you from revoking the deed.

HOW DO I REVOKE THE TOD DEED? There are three ways to revoke a recorded TOD deed: (1) Complete, have witnessed and notarized, and RECORD a revocation form. (2) Create, have witnessed and notarized, and RECORD a new TOD deed. (3) Sell or give away the property, or transfer it to a trust, before your death and RECORD the deed. A TOD deed can only affect property that you own when you die. A TOD deed cannot be revoked by will.

CAN I REVOKE A TOD DEED BY CREATING A NEW DOCUMENT THAT DISPOSES OF THE PROPERTY (FOR EXAMPLE, BY CREATING A NEW TOD DEED OR BY ASSIGNING THE PROPERTY TO A TRUST)? Yes, but only if the new document is RECORDED. To avoid any doubt, you may wish to RECORD a TOD deed revocation form before creating the new instrument. A TOD deed cannot be revoked by will, or by purporting to leave the subject property to anyone via will.

IF I SELL OR GIVE AWAY THE PROPERTY DESCRIBED IN A TOD DEED, WHAT HAPPENS WHEN I DIE? If the deed or other document used to transfer your property is RECORDED within 120 days after the TOD deed would otherwise operate, the TOD deed will have no effect. If the transfer document is not RECORDED within that time period, the TOD deed will take effect.

I AM BEING PRESSURED TO COMPLETE THIS FORM. WHAT SHOULD I DO? Do NOT complete this form unless you freely choose to do so. If you are being pressured to dispose of your property in a way that you do not want, you may want to alert a family member, friend, the district attorney, or a senior service agency.

DO I NEED TO TELL MY BENEFICIARY ABOUT THE TOD DEED? No. But secrecy can cause later complications and might make it easier for others to commit fraud.

WHAT DOES MY BENEFICIARY NEED TO DO WHEN I DIE? Your beneficiary must do all of the following: (1) RECORD evidence of your death (Prob. Code § 210). (2) File a change in ownership notice (Rev. & Tax. Code § 480). (3) Provide notice to your heirs that includes a copy of this deed and your death certificate (Prob. Code § 5681). Determining who is an "heir" can be complicated. Your beneficiary should consider seeking professional advice to make that determination. (4) RECORD an affidavit affirming that notice was sent to your heirs (Prob. Code § 5682(c)). (5) If you received Medi-Cal benefits, your beneficiary must notify the State Department of Health Care Services of your death and provide a copy of your death certificate (Prob. Code § 215). Your beneficiary may wish to consult a professional for assistance with these requirements.

WHAT IF I NAME MORE THAN ONE BENEFICIARY? Your beneficiaries will become co-owners in equal shares as tenants in common. If you want a different result, you should not use this form.

HOW DO I NAME BENEFICIARIES? (1) If the beneficiary is a person, you MUST state the person's FULL name. You MAY NOT use general terms to describe beneficiaries, such as "my children." You may also briefly state that person's relationship to you (for example, my spouse, my son, my daughter, my friend, etc.), but this is not required. (2) If the beneficiary is a trust, you MUST name the trust, name the trustee(s), and state the date shown on the trust's signature page. (3) If the beneficiary is a public or private entity, name the entity as precisely as you can

WHAT IF A BENEFICIARY DIES BEFORE I DO? If all beneficiaries die before you, the TOD deed has no effect. If a beneficiary dies before you, but other beneficiaries survive you, the share of the deceased beneficiary will be divided equally between the surviving beneficiaries. If that is not the result you want, you should not use the TOD deed.

WHAT IS THE EFFECT OF A TOD DEED ON PROPERTY THAT I OWN AS JOINT TENANCY OR COMMUNITY PROPERTY WITH RIGHT OF SURVIVORSHIP? If you are the first joint tenant or spouse to die, the deed is VOID and has no effect. The property transfers to your joint tenant or surviving spouse and not according to this deed. If you are the last joint tenant or spouse to die, the deed takes effect and controls the ownership of your property when you die. If you do not want these results, do not use this form. The deed does NOT transfer the share of a co-owner of the property. Any co-owner who wants to name a TOD beneficiary must complete and RECORD a SEPARATE deed.

CAN I ADD OTHER CONDITIONS ON THE FORM? No. If you do, your beneficiary may need to go to court to clear title.

IS PROPERTY TRANSFERRED BY THE TOD DEED SUBJECT TO MY DEBTS? Yes.

DOES THE TOD DEED HELP ME TO AVOID GIFT AND ESTATE TAXES? No.

HOW DOES THE TOD DEED AFFECT PROPERTY TAXES? The TOD deed has no effect on your property taxes until your death. At that time, property tax law applies as it would to any other change of ownership.

DOES THE TOD DEED AFFECT MY ELIGIBILITY FOR MEDI-CAL? No.

AFTER MY DEATH, WILL MY HOME BE LIABLE FOR REIMBURSEMENT OF THE STATE FOR MEDI-CAL EXPENDITURES? Your home may be liable for reimbursement. If you have questions, you should consult an attorney.

lf You Need Legal Advice

Accurate, plain-English legal information can help many people create useful legal documents. But general information is never a substitute for personalized advice from a knowledgeable lawyer. If you want professional advice about the best way to craft or use legal documents in your particular circumstances, consult an attorney licensed to practice in California.