What Is a Transfer-on-Death Deed in California?

California law calls it a revocable transfer on death deed, often shortened to a TOD deed. A California Senate Judiciary Committee analysis describes it as a deed that names a beneficiary to receive the property when the owner dies, so a homeowner can pass a home directly without the expense of creating a trust or going through probate.

I'm Jeanette Nelson, a REALTOR® with Jeanette Nelson Real Estate, Keller Williams Realty, serving Orange County, Huntington Beach, Costa Mesa, Fountain Valley, and surrounding areas. If your family is considering one, or settling a home that passed by one, it helps to understand the basics before you meet with your attorney.

This article is general information, not legal advice. Please talk with an estate planning attorney before you sign or rely on a TOD deed.

The Senate analysis says California allows a TOD deed for real property with four or fewer residential units, a condominium unit, or a single tract of agricultural land of 40 acres or less with a single-family home. The 2021 bill that updated these deeds excluded stock cooperatives.

The State Board of Equalization (BOE) adds two points. A TOD deed doesn't transfer a co-owner's share, so each co-owner who wants one records a separate deed. And if title is held in joint tenancy or community property with right of survivorship, the survivorship rights generally control while the other owner is living.

Under the rules described in the Senate analysis, the owner must have the capacity to contract, name the beneficiary, sign and date the deed and have it notarized. For deeds signed on or after January 1, 2022, two witnesses must also sign, and both must be present when the owner signs or acknowledges the deed. If a beneficiary signs as a witness, the deed is presumed to be the product of fraud or undue influence.

The BOE explains that the deed must be recorded within 60 days after it is signed and notarized, and before the owner's death. It has no effect until it's recorded. In Orange County, documents are recorded with the Orange County Clerk-Recorder.

The Senate analysis also notes that the law authorizing these deeds currently runs until January 1, 2032. Check with your attorney for any later changes.

Yes. The BOE explains that the owner can revoke a TOD deed at any time, and the beneficiary's consent isn't needed. It lists three ways: recording a revocation, recording a new TOD deed, or recording a deed transferring the property to someone else or to a trust. A TOD deed can't be revoked by a will.

The BOE says recording a TOD deed during the owner's life isn't a change in ownership for property taxes. The change in ownership happens at death, and the beneficiary must file a Change in Ownership Statement with the county assessor within 150 days of the date of death. Whether the property tax base can carry over to a child is a separate question under Proposition 19, which the BOE explains on its Prop 19 page.

The Senate analysis also notes two duties that matter to families. The beneficiary must give notice to the owner's heirs after the death. And a beneficiary can be personally liable for certain unsecured debts of the owner, including funeral expenses and expenses of last illness, up to a calculated share.

Both can avoid probate for the home. The Orange County Superior Court's self-help page explains that property held in a living trust passes to the beneficiaries without probate. A trust can also hold other assets, name a successor trustee to manage things and handle more complex wishes. A TOD deed covers one property and passes it directly to the named person.

If the beneficiary later wants to sell, the steps look different from a trust sale. You can compare in selling a house in a trust in California and do I need probate to sell an inherited house.

If your family is planning ahead for a parent's home, or settling a home that passed by a TOD deed, I'd love to help you think through the next steps alongside your attorney. Let's start with a private planning conversation. Call or text me at 714.366.8575 | DRE: 01397168, or contact me. Jeanette Nelson is a REALTOR® with Jeanette Nelson Real Estate, Keller Williams Realty, serving Orange County, Huntington Beach, Costa Mesa, Fountain Valley, and surrounding areas.