What is a California Transfer on Death Deed?
Property owners can use a Transfer on Death Deed to transfer certain types of property upon death to avoid probate. California law allows Transfer on Death Deeds for transferring condominiums, single family homes on 40 acres or less, or multi-unit buildings with 4 or less units.
How to Obtain a Transfer on Death Deed
A Transfer on Death Deed is a simple one-page form that can be downloaded from most county courthouses. The form requires you to identify the property to be transferred, which is the “Assessor’s Parcel Number” and “Property Description” from the deed. You must identify the beneficiary or beneficiaries. The form must be signed and notarized. Once the form has been notarized, it must be filed with the county clerk within 60 days of the notarization, or else it will be void. Filing the form may incur a filing fee.
Advantages of a Transfer on Death Deed
The main advantage of a Transfer on Death Deed is that it is an easy, inexpensive way to avoid probate. The form can be created and filed without the assistance of an attorney. The Transfer on Death Deed is fully revocable. It can be revoked by filing a Revocation of a Transfer on Death Deed or by filing a new Transfer on Death Deed naming a new beneficiary. When property is transferred using a Transfer on Death Deed, the property will still have all mortgages and liens on the property, and the beneficiary will be responsible for these.
Disadvantage of a Transfer on Death Deed
A disadvantage to the Transfer on Death Deed is that it may become void if the beneficiary dies before the property owner. If property is held as a joint tenancy, the Transfer on Death Deed will become void if the person filing the Transfer on Death Deed dies before the co-owner. This situation can be avoided if both owners file a Transfer on Death Deed naming the same beneficiary. If the beneficiary is a minor, then a guardian will have to be appointed, which is an expensive process. Another disadvantage to a Transfer on Death Deed is that there may be issues of undue influence. There is very little case law on the subject of undue influence and Transfer on Death Deeds. Transfer on Death Deeds can only be used for real property assets, and if a person has significant other assets such as stocks or valuable personal property, then a living trust is better option.
In spite of the disadvantages, a Transfer on Death Deed is a viable option for avoiding probate for people who only have one significant asset and no co-owners.