FAQ For TODs – Common Questions About Transfer On Death Deeds

Questions about using Transfer on Death (TOD) deeds

Housing & Economic Rights Advocates, an East Bay legal aid organization, recently gave an estate planning workshop here at Alameda County Law LibraryHERA provides estate planning services, fees for which are based on a sliding scale.  During the program, the HERA staff attorneys discussed the various estate planning options that may be used to avoid the court costs that mount up when as estate goes through the probate process.  One of the topics discussed was the Transfer on Death deed (TOD) – pros and cons.  The attorneys provided a TOD FAQ document to the attendees.  The FAQ is part of the text of California Probate Code Section 5642 which introduced TODs to California.

Quick review

Back in 2015, California legislators passed legislation to allow for the use of a document – Transfer on Death (TOD) deed –  that allows for transfer of property title after the death of an owner.   A TOD avoids the need to include real property as an asset when probating an estate.  As of January 1, 2016, a property owner may record, in the county property records, a document that names a beneficiary who will receive the interest that the owner has in real property after the owner’s death.  The document is revocable – it can be rescinded while the owner still lives.  There are rules to follow and subsequent paperwork to be completed for this transaction to be completed successfully.  The TOD has its limitations and restrictions.  Using it may not allow you to transfer your property as you would like.  A prior post with more details and links to TOD document templates can be read HERE.

Here is the FAQ:

From California Probate Code Section 5642 (Added by Stats. 2015, Ch. 293, Sec. 17. Effective January 1, 2016. Repealed as of January 1, 2021, pursuant to Section 5600.)

COMMON QUESTIONS ABOUT THE USE OF THIS FORM
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 BUSINESS PROPERTY?

This deed can only be used to transfer (1) a parcel of property that contains one to four residential dwelling units, (2) a condominium unit, or (3) a parcel of agricultural land of 40 acres or less, which contains a single-family residence.

HOW DO I USE THE TOD DEED?

Complete this form. Have it 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 sign it or the deed has no effect.

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 FORM?

Take the completed and notarized form to the county recorder for the county in which the property is located. Follow the instructions given by the county recorder to make the form part of the official property records.

WHAT IF I SHARE OWNERSHIP OF THE PROPERTY?

This form 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 notarized, and RECORD a revocation form. (2) Create, have 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 before your death, the TOD deed will have no effect. If the transfer document is not RECORDED before your death, 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 RECORD evidence of your death (Prob. Code § 210), and file a change in ownership notice (Rev. & Tax. Code § 480). 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).

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?

You MUST name your beneficiaries individually, using each beneficiary’s FULL name. You MAY NOT use general terms to describe beneficiaries, such as “my children.” For each beneficiary that you name, you should briefly state that person’s relationship to you (for example, my spouse, my son, my daughter, my friend, etc.).

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.

 

The Alameda County Law Library provides access to legal information sources to for members of the Alameda County community to conduct legal research.  The staff of the Alameda County Law Library are not practicing attorneys.  We cannot give you legal advice or refer you to a lawyer. If you are seeking professional advice on California law, you should consult with a lawyer licensed by the State Bar of California.

 

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