Transfer on Death Deed | New CA Real Estate Law for Buyers and Owners

John McConnin, Esq
Published on May 24, 2016

Transfer on Death Deed | New CA Real Estate Law for Buyers and Owners

Real Estate owners in California have a new way to keep their homes out of Probate.

As of January 1st 2016 California’s have very simple and inexpensive way to keep their real estate out of Probate.  Its called a Transfer on Death Deed or a Revocable Transfer on Death deed.

Below is the Probate Code which describes this new Estate Planning Vehicle.

Estate Planning Options

Overall this is new Revocable Transfer on Death Deed is great news for home owners  especially single people or people who hold real estate in their name only.

Common Ways to hold title in California

  1. Community Property
  2. Joint Tenancy
  3. Tenancy in Common
  4. Tenancy in Partnership
  5. Title Holding Trust
  6. Community Property with Right of Survivorship

Community Property with a Right of Survivorship has been an excellent way to avoid Probate.  Living Trust were another way for people to have property pass outside of Probate. Now people particularly single people widows and widowers should consider utilized this new way to transfer property after they die.

 

Planning on Buying a Home

Now more than ever your Realtor should have an attorney on their team to help you make decision regarding how you are going to take title.

 

CA Transfer on Death Deed

Revocable Transfer on Death Deed in California

PROBATE CODE
SECTION 5642-5644

5642.  A revocable transfer on death deed shall be substantially in
the following form.
   (a) The first page of the form shall be substantially the
following:

     SIMPLE REVOCABLE TRANSFER ON DEATH (TOD) DEED
        (California Probate Code Section 5642)
  Recording Requested By:
  When Recorded Mail This Deed To
  Name:
  Address:
  Assessor's Parcel Number:       Space Above For
  Recorder's Use
  This document is exempt from documentary transfer
  tax under Rev. & Tax. Code  Sec.  11930. This document
  is exempt from preliminary change of ownership
  report under Rev. & Tax. Code  Sec.  480.3.
    IMPORTANT NOTICE: THIS DEED MUST BE RECORDED ON
   OR BEFORE 60 DAYS AFTER THE DATE IT IS SIGNED AND
                       NOTARIZED
  Use         this deed to transfer the residential
  property described below directly to your named
  beneficiaries when you die. YOU SHOULD CAREFULLY
  READ ALL OF THE INFORMATION ON THE OTHER PAGES OF
  THIS FORM. You may wish to consult an attorney
  before using this deed. It may have results that
  you do not want. Provide only the information
  asked for in the form. DO NOT INSERT ANY OTHER
  INFORMATION OR INSTRUCTIONS. This form MUST be
  RECORDED on or before 60 days after the date it
  is signed and notarized or it will not be
  effective.
             PROPERTY         DESCRIPTION
  Print the legal description of the residential
  property affected by this deed:
  __________________________________________________
                   BENEFICIARY(IES)
  Print the FULL NAME(S) of the person(s) who will
  receive the property on your death (DO NOT use
  general terms like "my children) and state the
  RELATIONSHIP that each named person has to you
  (spouse, son, daughter, friend, etc.):
  __________________________________________________
  __________________________________________________
  __________________________________________________
                   TRANSFER ON DEATH
  I transfer all of my interest in the described
  property to the named beneficiary(ies) on my
  death. I may revoke this deed. When recorded,
  this deed revokes any TOD deed that I made before
  signing this deed.
  Sign and print your name below (your name should
  exactly match the name shown on your title
  documents):
  ___________________________________________ Date _
  NOTE: This deed only transfers MY ownership share
  of the property. The deed does NOT transfer the
  share of any co-owner of the property. Any co-
  owner who wants to name a TOD beneficiary must
  execute and RECORD a SEPARATE deed.
               ACKNOWLEDGMENT OF NOTARY
  A notary public or other officer completing this
  certificate verifies only the identity of the
  individual who signed the document to which this
  certificate is attached, and not the
  truthfulness, accuracy, or validity of that
  document.
  State of         California                 )
  County of _________________________________ )
  On ___________________________ before me, (here
  insert name and title of the officer), personally
  appeared ___________________________, who proved
  to me on the basis of satisfactory evidence to be
  the person(s) whose name(s) is/are subscribed to
  the within instrument and acknowledged to me that
  he/she/they executed the same in his/her/their
  authorized capacity(ies), and that by
  his/her/their signature(s) on the instrument the
  person(s), or the entity upon behalf of which the
  person(s) acted, executed the         instrument.
  I certify under PENALTY OF PERJURY under the laws
  of the State of California that the foregoing
  paragraph is true and correct.
  WITNESS my hand and official seal.
  Signature ___________________________ (Seal)

   (b) Subsequent pages of a form executed under this section shall
be in substantially the following form:

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.

     IMPORTANT         NOTICE: THIS FORM MUST BE
               RECORDED TO BE EFFECTIVE
  This revocation form MUST be RECORDED before
  your death or it will not be effective. This
  revocation form only affects a transfer on death
  deed that YOU made. A transfer on death deed
  made by a co-owner of your property is not
  affected by this revocation form. A co-owner who
  wants to revoke a transfer on death deed that
  he/she made must complete and RECORD a SEPARATE
  revocation form.
                 PROPERTY DESCRIPTION
  Print the legal description of the property
  affected by this revocation:
  _________________________________________________
                      REVOCATION
  I revoke any TOD deed to transfer the described
  property that I executed before executing this
  form.
                  SIGNATURE AND DATE
  Sign and print your name below (your name should
  exactly match the name shown on your title
  documents):
  __________ Date _________________________________
               ACKNOWLEDGMENT OF NOTARY
  A notary public or other officer completing this
  certificate verifies only the identity of the
  individual who signed the document to which this
  certificate is attached, and not the
  truthfulness, accuracy, or validity of that
  document.
  State of   )
  California
  County of
  __________ )
  On ___________________________ before me, (here
  insert name and title of the officer),
  personally appeared ___________________________,
  who proved to me on the basis of satisfactory
  evidence to be the person(s) whose name(s)
  is/are subscribed to the within instrument and
  acknowledged to me that he/she/they executed the
  same in his/her/their authorized capacity(ies),
  and that by his/her/their signature(s) on the
  instrument the person(s), or the entity upon
  behalf of which the person(s) acted, executed
  the instrument.
  I certify under PENALTY OF PERJURY under the
  laws of the State of California that the
  foregoing paragraph is true and correct.
  WITNESS my hand and official seal.
  Signature         ___________________________
  (Seal)

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How Should a Couple Take Title in California

Transfer on Death Deed | New CA Real Estate Law for Buyers and Owners
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