California has historically provided four options for the transfer of real property upon a property owner’s death:
- joint tenancy agreements
- community property with right of survivorship
- wills
- living trusts
However, in January 2016, the California Legislature passed Assembly Bill 139, allowing a fifth option for the non-probate transfer of property to a designated beneficiary, known as the Revocable Transfer on Death Deed.
Because A.B. 139 has a sunset date of December 31, 2020, many clients reach out to their California estate planning attorneys to question, “Is a Revocable Transfer on Death Deed Valid In California?”
Let’s examine what is required for a revocable transfer on death deed to be valid in California.
What is a California Revocable Transfer on Death Deed?
California Revocable Transfer on Death Deeds are deeds to real property allowing for the direct, non-probate transfer of said property to a designated beneficiary upon the transferor’s death.
What Qualifies for a Revocable Transfer on Death Deed?
A.B 139 qualifies three types of property eligible for a transfer on death (TOD) deed:
- A single family home or condominium unit;
- A single family residence on agricultural property of 40 acres or less;
- A residence of no more than four residential dwelling units
TOD transfers of these types of residence units are particularly attractive to single owners who wish to leave their property to a designated beneficiary.
Filing a Revocable Transfer on Death Deed
While TOD deeds are fairly simple to complete, property owners must complete and file the forms correctly, observing the following:
- TOD deeds must be completed by the property owner(s). If the property is held in joint ownership, each owner must complete a TOD deed, naming the same beneficiary on each deed.
- The names on the deeds, and the property descriptions must match your current deed/ title documents exactly.
- Beneficiaries must be listed by name and their relationship to the property owner specified.
- Each TOD deed must be signed and notarized and recorded within 60 days of such.
- It is also important that the TOD deed be completed substantially according to the California Probate Code. When completing the forms, it may be wise to ask your estate planning attorney to review the documents for accuracy, completeness, and code compliance.
I’ve Filed my TOD Deed, Now What?
Once you have met all of the TOD deed provisions and have filed your deed, you can rest assured that the property will pass to the named beneficiary upon your death. There is no transfer of ownership or ownership rights extended to your beneficiary while you are living, and you may revoke the TOD deed at any time.
If the named beneficiary to the property predeceases you, it is important you contact your CA estate planning lawyer and make new provisions for the transfer of the property upon your death. Otherwise, your property may become subject to probate.
Is My Deed Invalid When the Transfer of Death Deed Law Expires?
California’s attempt to provide homeowners with a new, non-probate transfer of real property through A.B 139 remains effective until December 31, 2020. After that date, no new TOD deeds may be filed unless the legislature approves the continued use of TOD deeds. Absent an extension of the bill after December 31, 2020, only California revocable transfer on death deeds properly executed prior to January 1, 2021, will be considered valid.
Do I need a Lawyer to file a Revocable Transfer on Death Deed?
The appeal of California's transfer on death deed is in part cost effectiveness and simplicity. However, when considering any transfer of ownership of real property as part of a legacy plan, document review by an experienced estate planning attorney is highly recommended.
Contact our office today to learn more about California’s TOD deeds and whether they are viable options in your overall estate plan.