New California Transfer On Death Deed
There are several ways an owner of real property can direct the transfer of real property when they die. Up until recently, the most common way was through a trust, will or owning the property in joint tenancy with another person or persons. Effective January 1, 2016, there is now a new way California allows real property to be transferred upon a person’s death and avoid probate.
Governor Jerry Brown signed Assembly Bill 139 which established a procedure to transfer real property upon death through a revocable transfer on death deed. This revocable transfer on death deed is a new simple and inexpensive way to transfer real property to a beneficiary in California. The deed allows a person to leave their real property to a designated person or persons such as a family member, friend, life-long partner or other loved one, without having to set up a living trust.
Criteria For Transfer on Death Deed (TOD Deed)
The new TOD (transfer on death) deed allows an owner of residential real property to name one or more beneficiaries to receive the property when the owner dies, thus bypassing the need to probate the estate. There are some specific criteria, however, that a person should be aware of when considering recording a revocable transfer on death deed.
The real property must be a single family home or condominium unit, or a multiple residence of not more than 4 residential dwelling units, or be a single family residence on no more than 40 acres of agricultural land. A revocable TOD deed must be signed and dated before a notary public to be effective and valid. The transfer on death deed must be recorded within 60 days or less from the date it is signed. The transfer on death deed can be revoked by the transferor at any time. A Transfer On Death Deed may be a great option for a person whose only asset is the home in which he or she lives. Revoking a
Transfer on Death Deed
There are three ways the transferor/owner can revoke a transfer on death deed.
The owner can record a formal notice of revocation. A new transfer on death deed may be recorded. The real property can be transferred to someone else prior to the transferor’s death. Although the transfer on death deed must be recorded within 60 days or less from the date it is it signed and before the owner’s death, it is important to understand that the interest in the real estate only transfers when the owner dies. This means that the beneficiary identified on the TOD deed does not have any rights to the real property when the owner is alive. Furthermore, creditors of a named beneficiary cannot place any liens on the property. While the owner is living, the owner has the right to sell or encumber the property. The property is also subject to involuntary liens that may be recorded by creditors of the owner which would transfer with the property to the beneficiary upon the owner’s death.