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CALIFORNIA APPROVED TRANSFER ON DEATH DEEDS

In California the average property value is high and the cost of probate to transfer a home is costly as well.  Some may have been advised to secure their real property in a Trust or vested with Right of Survivorship, however as of January 1, 2016, Assembly Bill 139 provided a new way to avoid the cost of a Probate and the procedure itself.

The AB 139 provides for the automatic transfer of ownership of residential real property upon the death of the owner through the use of a document entitled “Simple Revocable Transfer on Death (TOD) Deed” (“TOD”).   A “residential property” as defined by Law is a 1-4 family residential unit(s), a condominium or agricultural land improved with a residence and consisting of 40 acres or less.

It is recommended that you consult your Attorney or Accountant to advise if this is the correct entitlement for you.

HOW DO I ESTABLISH A TOD?

A Transfer on Death Deed or TOD is not effective until the transferor (owner of record) signs and dates the deed before a notary public. It must be recorded within 60 days of the date of execution in the same County that the Real Property exists.

WHO CAN REVOKE A TOD?

Only the grantor has the option to revoke a TOD. This can be done in one of three ways: (1) to record a “Revocation of Revocable Transfer on Death (TOD) Deed”; (2) by recording a new and different TOD; or (3) transferring the property to a third party via a deed recorded prior to the death of the grantor (such as a sale or transfer Grant Deed).

HOW DOES IT TRANSFER?

If no transfer Grant Deed or Revocation has been recorded and the TOD is properly executed before a Notary Public and recorded then upon the death of the grantor, an Affidavit of Death or other evidence of death must be recorded to transfer ownership to the named beneficiary. This TOD should be used if only one person holds title to the property as the “right of survivorship” rules trump such a deed.  A TOD would be unenforceable against an owner claiming title through joint tenancy of community property with right of survivorship.

WHEN DOES IT EXPIRE?

Once correctly executed and recorded in the County on your property within the time requirements, it remains valid.

This law will no longer be in effect on January 1, 2021 unless a bill is passed to extend the current AB 139.  California is concerned how this bill may contribute to elder abuse and fraud.  This will be taken into consideration when deciding to extend or not.

A TOD executed or recorded after January 1, 2021 will not be valid.