Probate is a court-supervised process for transferring property—including real estate—from a deceased person to his or her heirs or beneficiaries. In California, probate can be complicated, time-consuming, and expensive. Many people prefer to avoid probate of their California real estate. This can be accomplished with deeds.
Two categories of deeds can be used to avoid probate in California:
- Lifetime Transfers with Survivorship Rights – Deeds that immediately transfer an interest to a co-owner with a right of survivorship.
- Estate Planning Deeds – Deeds that become effective at an owner’s death, at which time they transfer property to another owner. This category includes Life Estate Deeds and Transfer-On-Death Deeds.
This article discusses these options and the pros and cons of each.
Avoiding California Probate with Lifetime Transfers with Survivorship Rights
Probate can be avoided by making an immediate transfer of California real estate to a co-owner using a deed form that includes a right of survivorship. A right of survivorship is a form of co-ownership that immediately passes title to the surviving owners on the death of one of the owners. See How to Add a New Owner to the Title Deed to Real Estate for more information about how to add a new owner.
Example: Peter and Mary own a home as joint tenants with right of survivorship. Upon Peter’s death, his interest in the home automatically passes to Mary. To remove Peter from title to the property, Mary can file an Affidavit of Survivorship and other simple forms instead of going through probate. See How to Remove a Deceased Owner from a Title Deed to Real Estate for more information about the specific steps needed to remove a deceased owner.
In California, two types of deeds create a right of survivorship:
- Joint Tenancy with Right of Survivorship – Available to anyone, including spouses
- Community Property with Right of Survivorship – Available to spouses only
Each of these deeds requires specific language to be included in the deed when it is created. Our Deed Generator automatically includes the appropriate language based on the choices you make in the interview. For more information about these and other forms of co-ownership, see What are the Forms of Co-Ownership?
Lifetime transfers work to avoid probate, but there are a few significant problems. The biggest issue is that the person added to the property immediately becomes a co-owner of the property. As a co-owner, the new owner has immediate and equal rights to use and possession of the property. It also requires the new owners consent to mortgage, sell, or otherwise deal with the property. This can be a problem if the new owner becomes mentally incapacitated or otherwise refuses to cooperate in these types of transactions.
Lifetime transfers also open the property up to risks. If the new co-owner is sued or doesn’t pay his or her creditors, those creditors may seize an interest in the property to satisfy a court judgment. The new co-owner may also break the survivorship rights by transferring his or her interest to someone else.
For these reasons, lifetime transfers are usually a second-best choice. Estate planning deeds—and particularly California Revocable Transfer-On-Death Deeds—can be a better option.
Avoiding California Probate with Estate Planning Deeds
Estate planning deeds become effective on an owner’s death. There are two primary types of estate planning deeds in California: Life Estate Deeds and California Revocable Transfer-On-Death Deeds.
California Life Estate Deeds
A Life Estate Deed is a special deed that splits possession and use of real estate into different time periods. The person that creates the deed that reserves the life estate is called a life tenant. His or her use lasts during the term of his or her lifetime. At the life tenant’s death, the property passes to one or more new owners called remainder beneficiaries.
Even though the remainder beneficiaries do not have the right to possess or use the property during the life tenant’s lifetime, they do have an immediate economic interest in the property. This means that Life Estate Deeds have the same drawback as lifetime transfers: They create immediate rights in the new owners. Although these rights do not become possessory until the life tenant’s death, each remainder beneficiary has an immediate economic interest in the property. The life tenant cannot sell or deal with the property without involving the remainder beneficiaries.
See What is a Life Estate? for more information about Life Estate Deeds.
California Revocable Transfer-On-Death Deeds
Transfer-On-Death Deeds (also called TOD Deeds) are a relatively new way to avoid probate in California. They were first authorized in 2016.
Like Life Estate Deeds, Transfer-On-Death Deeds do not give the new owner any possessory rights in California real estate until the current owner’s death. But unlike Life Estate Deeds, Transfer-On-Death Deeds do not require the involvement of the new owners to deal with the property. The current owner can revoke the deed, name new beneficiaries, sell the property, and otherwise make decisions regarding the property without involving or accounting to the beneficiaries.
See California Transfer-On-Death Deeds for more information about using this new form of deed to avoid California probate.
Avoiding California Probate with Living Trusts
Living trusts can also avoid probate. Because a living trust survives an owner’s death, it can be used to transfer an interest outside of the California probate process. When the owner dies, the person named in the document (called a successor trustee) takes over and can transfer real estate to the trust beneficiaries under the terms of the trust.