California Transfer on Death Deed Form

What is a California transfer-on-death (TOD) deed?

A California transfer-on-death deed is a special form of estate-planning deed that allows property to automatically transfer to a new owner when the current owner dies. A California TOD deed gives the owner continued control over the property during life and avoids probate at the owner’s death.

California first authorized TOD deeds on January 1, 2016, joining the majority of states that authorize revocable deeds that transfer property effective at the owner’s death. California’s TOD deed law uses the name revocable transfer-on-death deed, but the word “revocable” is often omitted. California real estate professionals typically use the names transfer-on-death deed or TOD deed (or simply TODD). Alternate names used for equivalent deeds in some other states include transfer-on-death instrument (Illinois), deed upon death (Nevada), or beneficiary deed (Arizona).

What is the purpose of a California TOD deed?

California TOD deeds function in much the same way for real estate as a POD or beneficiary designation works on a bank account. The owners can decide during life who will receive their home upon their death. A TOD deed lets a property owner accomplish the twin goals of continued flexibility during life and probate avoidance at death.

California Assemblyman Mike Gatto—who sponsored California’s TOD deed law—noted of TOD deeds:

Just like a person can designate a bank account to go to a loved one upon death, by allowing individuals to transfer property cleanly through a TOD deed, we can avoid the expensive probate process and give families greater peace of mind.

Before 2016, living trusts were the go-to technique for avoiding California probate. Real estate transferred to a living trust is no longer owned by a living person and need not be probated when that person dies. A California TOD deed form provides a relatively simple, low-cost alternative to a living trust.

What is the benefit of avoiding probate?

A transfer-on-death deed allows homeowners to avoid probate at death.1 When the homeowner dies, the property passes directly to the beneficiaries named in the deed without becoming part of the probate estate. Avoiding probate reduces the complexity and expense of estate administration. Family members receive title to the property sooner, and there is more certainty about what happens to the property when the owner dies.

What other advantages do California transfer-on-death deeds have?

Along with avoiding probate, California TOD deeds offer several other advantages that make them a popular estate-planning tool for California homeowners:

  • Retained control and flexibility. The homeowner keeps control over the property during his or her lifetime. The homeowner can revoke the TOD deed or change his or her mind about the transfer.
  • Continuity of ownership. A transfer-on-death deed does not take effect until the owner’s death, so there are no immediate consequences to the homeowner. This means the homeowner continues to qualify for homestead exemptions and any other property tax benefits.
  • Medicaid eligibility. A California TOD deed does not affect Medi-Cal eligibility because the deed has no effect during the person’s lifetime. After the owner’s death, the home may be liable for reimbursement for Medi-Cal expenses paid before the owner’s death.
  • Low legal fees. Although a living trust can accomplish the principal goal of a transfer-on-death deed, a TOD deed provides a less expensive alternative.
  • Federal Income Tax Benefits. A transfer-on-death deed is disregarded for federal tax purposes. The homeowner is considered to own the property until his or her death—at which point it passes to the beneficiaries. The transferred property qualifies for a basis step-up at death—which effectively avoids income tax liability for appreciation in the property’s value through the date of death.

What types of property can be transferred using a California TOD deed?

California limits the use of TOD deeds to ownership interests in real property as defined in the TOD law.2 California real estate that can be transferred using a TOD deed includes most residential properties with four or fewer dwellings.3 “Real property” includes a separate interest in a residential condo unit but does not include interests in stock cooperatives (or co-ops) or agricultural parcels exceeding 40 acres.

California TOD deeds are useful only for real estate located in California. A California resident who owns real estate in another state cannot transfer the out-of-state property with a California TOD deed. He or she may be able to use a TOD deed created under the other state’s law (if the other state authorizes TOD deeds).

What Is the effect of a California TOD deed while the owner Is alive?

The creation and recording of a TOD deed have no immediate legal consequences.4 The homeowner continues to hold all the same ownership rights in the real estate. He or she can still transfer the property, sign contracts that affect the property, or borrow against the property. The owner also reserves the right to designate a new beneficiary or revoke the TOD deed.

Recording a California TOD deed does not affect the owner’s property taxes during the owner’s lifetime.5

Can the owner sell the property after recording a TOD deed?

A TOD deed does not interfere with the homeowner’s right to sell, transfer, or mortgage the property during the owner’s life.6 Neither the beneficiaries nor any of the beneficiaries’ creditors have vested rights in the property while the owner is alive. The owner need not obtain the beneficiaries’ consent—or even notify the beneficiaries at all—to transfer the property.

The broad ownership rights retained by the owner distinguish TOD deeds from traditional life estate deeds, which give the remainder beneficiary an immediate right to future possession of the property. An owner who records a life estate deed keeps the property for life but can sell the property only with the beneficiary’s consent.

Is a California TOD deed revocable?

A homeowner who records a California TOD deed has the right to revoke the deed at any time until his or her death.7 The owner can revoke the deed by either creating and recording a new TOD deed or filing a written revocation in the land records. California’s TOD deed statute has a specific form—titled Revocation of Revocable Transfer-on-Death Deed—for revoking a TOD deed.8

The owner can also effectively cancel the TOD deed by transferring the property to someone else while the owner is still living. Another deed that transfers the property takes priority over the TOD deed if the other deed is recorded during the owner’s life and after the TOD deed.9

Attorney Practice Note: Another type of estate-planning deed called a lady bird deed (or enhanced life estate deed) also allows a property owner to name a beneficiary to take title when the owner dies without giving up control of the property during the owner’s life. TOD deeds and lady bird deeds serve the same basic purpose, but there are some other differences between the two types of deeds. California does not recognize lady bird deeds. They can be used in only a handful of states—including Florida, Texas, and Michigan.

What Is the effect of a California TOD deed when the owner dies?

A TOD deed becomes legally effective when the homeowner dies. The home passes automatically to the beneficiary named in the TOD deed and does not become part of the owner’s probate estate.10 The beneficiary provides notice of the TOD deed to the owner’s other heirs and records evidence of the owner’s death to update the county land records.11

The TOD deed transfers the property to the beneficiaries with no warranty of title.12 A beneficiary who takes title under a TOD deed may wish to purchase title insurance to make up for the TOD deed’s lack of warranty of title.

The beneficiary receives the property subject to any liens, mortgages, or other third-party interests (encumbrances) recorded against the property. 13 The beneficiary may be liable to the owner’s estate—up to the value of the property—if the owner’s estate is insufficient to satisfy estate claims.14

Attorney Practice Note: A beneficiary who takes title under a California TOD deed may have obligations relating to Medi-Cal and taxes on the property. When the owner dies, the beneficiary must notify the California State Department of Health Care Services if the homeowner received Medi-Cal benefits before his or her death. The property may be subject to a Medi-Cal reimbursement claim.15

The beneficiary is also responsible for any taxes that result from transferring ownership of the property. A California TOD deed does legally change the property’s ownership during the owner’s life, but the transfer at the owner’s death is considered a “change in ownership” that may result in beneficiary obligations relating to property tax and documentary stamp tax.16

Can a California TOD deed leave property to multiple beneficiaries?

An owner can name multiple beneficiaries when creating a California TOD deed.17 Co-beneficiaries take title in equal shares as tenants in common.18 That means that if there are two beneficiaries they each receive a one-half ownership interest with no right of survivorship.

Can joint owners sign a California TOD deed?

California allows someone who is a joint owner to sign a TOD deed, but there are special rules to prevent contradictions between the terms of a TOD deed and co-owners’ survivorship rights. California has two forms of co-ownership that include survivorship rights.19 They are called joint tenancy with right of survivorship and (for married couples) community property with right of survivorship.

When co-owners hold title with survivorship rights, each owner’s interest in the property passes to the surviving co-owner upon death. The last surviving owner owns the entire property.

California law says that a TOD deed is ineffective if a surviving co-owner has a right of survivorship in the property when the owner dies.20 In other words, a co-owner’s right of survivorship has a higher priority than a beneficiary’s interest under a TOD deed. If the owner who dies is the last surviving co-owner—and therefore no co-owner has a right of survivorship in the property at the time of death—then the beneficiary receives the property under the TOD deed.

Attorney Practice Note: When joint owners with survivorship rights want to use a TOD deed to avoid probate, each owner should sign and record a separate TOD deed. When the first joint owner dies, that owner’s TOD deed will be invalid because there is a living co-owner with a right of survivorship. The last surviving owner’s TOD deed takes effect when he or she dies, and the property passes to the beneficiary named in the last surviving owner’s TOD deed.

The surviving co-owner still has the right to revoke or change his or her TOD deed during life. This creates a risk that a surviving co-owner will give the property to someone other than the originally intended beneficiary. This issue sometime arises in second marriage situations and can be addressed with an alternate approach such as a contract not to revoke the TOD deed or a transfer to a living trust.

California recognizes another co-ownership form—called tenancy in common—that has no right of survivorship. The interest of a co-owner (or tenant in common) ordinarily passes to his or her heirs at death. Because there is no right of survivorship, a tenant in common can transfer his or her ownership interest to a TOD deed beneficiary regardless of whether the other co-owner is still living at the time of death.

What happens If the beneficiary named in a California TOD deed dies before the owner?

A beneficiary’s interest under a California TOD deed is contingent on the beneficiary surviving the property owner.21 The beneficiary’s interest fails—or lapses—if the beneficiary dies before the owner. If a beneficiary’s interest lapses, that interest is transferred to other beneficiaries in equal shares.22 If there are no other beneficiaries, the property reverts to the owner’s probate estate and passes under the owner’s will or California’s intestate succession rules.

Must the owner notify the beneficiaries of the California TOD deed?

There is no need for the owner to notify beneficiaries when a TOD deed is recorded.23 Delivery of the TOD deed is also unnecessary, and the beneficiary need not accept the TOD deed when it is recorded. The beneficiary has the right to disclaim the property upon the owner’s death.24

Can a California TOD deed be used when the property is mortgaged?

An owner whose property is subject to an existing mortgage may still use a California TOD deed. Due-on-sale clauses in most mortgage agreements prevent the owner from transferring the real estate without the lender’s consent. However, the property transfer under a California TOD does not actually occur until the owner’s death.25 A federal law called the Garn-St. Germain Depository Institutions Act prevents mortgage lenders from enforcing a due-on-sale clause in response to “a transfer to a relative resulting from the death of a borrower.”26

A beneficiary who takes title to a mortgaged property under a California TOD deed receives the property subject to the mortgage.27 The beneficiary may need to make arrangements to satisfy the mortgage with the lender if the owner’s estate is insufficient to resolve estate claims.28

Must a California TOD deed be recorded?

A California TOD deed must be recorded with the county recorder for the county where the property is located.29 Recording must occur within 60 days after the TOD deed is notarized.30 An unrecorded TOD deed is ineffective—which typically results in the property going through probate.

Can a California TOD deed be signed by an agent under a power of attorney?

An agent under a power of attorney can sign a California TOD deed for the property owner if the owner has executed a valid power-of-attorney form that gives the agent the necessary authority.31 The power-of-attorney form must expressly authorize the agent to make or change beneficiary designations for the principal’s property.32 An agent under power of attorney (also called an attorney in fact) who signs a TOD deed must sign the principal’s name and sign the agent’s own name in the capacity as agent.33

A property owner must have capacity to contract to create a California TOD deed.34 A TOD deed signed by an agent for an owner who lacks capacity to contract may be subject to a challenge.

What are the requirements for a California TOD deed?

California law is particular about the requirements for TOD deeds. Many requirements are inflexible and differ from requirements for other types of deeds (like ordinary quitclaim deedsgrant deeds, and warranty deeds).

California’s TOD deed requirements include:

  • Residential property only. The property that a TOD deed transfers must be (a) real estate improved with from one to four residential dwelling units; or (b) a residential separate interest in a common-use development (such as a condominium unit).35 A TOD deed cannot transfer an interest in a stock cooperative (or co-op), agricultural land exceeding 40 acres, or other non-residential property.
  • Owner with legal capacity. The owner must have the legal capacity to sign contracts.36 This requires that the owner be at least 18 years old and be capable of understanding the consequences of the TOD deed.
  • Beneficiaries identified by name. The deed must identify the beneficiaries by name. A designation of beneficiaries by class is insufficient. 37 For example, identifying a TOD deed’s beneficiaries as “my children” is insufficient. Instead, the TOD deed must list each child by name.
  • Valid legal description. The property must be identified by a proper legal description.
  • Signed, dated, notarized, and witnessed. A California TOD deed must be signed by the owner and two witnesses, dated, and notarized (acknowledged by a notary public).38 The witnesses—who should not also be beneficiaries—must be present at the same time and see the owner sign or acknowledge the TOD deed.
  • Statutory form. California law does not allow just any deed form to qualify as a TOD deed. All TOD deeds must be in substantially the same form prescribed by California’s TOD deed law.39 California does not allow drafters to add custom conditions to the form, as some states do. A TOD deed should follow the specific statutory form to ensure that the deed will be accepted by the recorder, title companies, and (if needed) California courts.
  • Record within 60 days. The signed TOD deed must be recorded in the land records of the county where the property is located within 60 days after the deed is notarized.40

Need a transfer-on-death deed that meets California recording requirements?

Each deed produced by deed creation software is attorney-designed to comply with California law. Just complete a user-friendly interview and get a customized transfer-on-death deed in minutes.

Get Your TOD Deed Today

  1. Cal. Prob. Code § 5652(a).
  2. Cal. Prob. Code § 5620.
  3. Cal. Prob. Code § 5610(a).
  4. Cal. Prob. Code § 5650.
  5. Cal. Prob. Code § 5656.
  6. Cal. Prob. Code § 5650.
  7. Cal. Prob. Code § 5632.
  8. Cal. Prob. Code § 5644.
  9. Cal. Prob. Code § 5644.
  10. Cal. Prob. Code § 5652(a).
  11. Cal. Prob. Code § 5681.
  12. Cal. Prob. Code § 5652(c).
  13. Cal. Prob. Code § 5652(b).
  14. See Cal. Prob Code §§ 5674, 5677, 5678.
  15. Cal. Prob. Code § 5654.
  16. Cal. Prob. Code § 5656.
  17. Cal. Prob. Code § 5642.
  18. Cal. Prob. Code § 5652(a)(3).
  19. Cal. Civ. Code §§ 682.1; 683.
  20. Cal. Prob. Code § 5664.
  21. Cal. Prob. Code § 5652(a)(2).
  22. Cal. Prob. Code § 5652(a)(4).
  23. Cal. Prob. Code § 5626.
  24. Cal. Prob. Code § 5652(a)(1).
  25. See Cal. Prob. Code § 5656(a).
  26. 12 USC 1701j-3(d)(5).
  27. Cal. Prob. Code § 5652(b).
  28. See Cal. Prob Code §§ 5674, 5677, 5678.
  29. Cal. Gov. Code § 27280.
  30. Cal. Prob. Code § 5626.
  31. Cal. Prob. Code § 4123(b).
  32. Cal. Prob. Code § 4264(f).
  33. Cal. Civ. Code § 1095.
  34. Cal. Prob. Code § 5620.
  35. Cal. Prob. Code § 5610(a).
  36. Cal. Prob. Code § 5620.
  37. Cal. Prob. Code § 5622.
  38. Cal. Prob. Code § 5624.
  39. Cal. Prob. Code § 5642.
  40. Cal. Prob. Code § 5626.