The Transfer-on-Death Deed: A Unique California Estate Planning Tool

One of the primary goals of any estate planning is to determine the best methods of transferring property to your beneficiaries with the least amount of effort and time. As such, avoiding probate for your assets is a must for most people. Probate is a costly and time consuming process and assets that pass through probate are public record and at risk for contests by disgruntled heirs and family members. While a number of vehicles exist across the nation to avoid probate, such as the revocable living trust and assets held in joint tenancy in common with rights of survivorship, California offers an opportunity to its citizens to pass on real property without the need to go through probate.

Real Solutions for Real Property

When an estate planning attorney talks about real property, they are referring to property that is fixed to the land, including the land itself and buildings. As of January 1st, 2016, certain real property can be transferred upon a person’s death without probate through the use of a transfer-on-death deed. The transfer-on-death deed allows an owner of residential real property to name one or more beneficiaries to receive the real property when the owner dies. This bypasses the need to probate the estate to pass on the real property.

A beneficiary designation on this real property acts like the beneficiary designation on a life insurance policy. The beneficiary shows with a death certificate that the previous owner is now deceased and the real property should be retitled to reflect the beneficiary’s new ownership. It is far more efficient and faster than a typical probate estate, which can last, on average, anywhere from six months to a year to be closed out.

Requirements for a Transfer-on-Death Deed

A person cannot just draft a new deed for their home and slap a beneficiary designation on it and expect it to be upheld under California law. Specific requirements under California Probate Law Section 5642 must be met. These include:

  •      The real property must be a single family home, condominium unit or single family home on no more than 40 acres of agricultural land;
  •      The revocable transfer-on-death deed must be recorded within 60 days or less from the date it was signed;
  •      The deed must be notarized; and
  •      A beneficiary must be designated.

A transfer-on-death deed may be revoked at any time while the owner is still living and the beneficiary has no interest in the property until it vests after the current owner’s death. Even after the death of the owner, if there is suspected fraud, the transfer may be contested within 120 days after the current owner has passed.

Consult with a Sonoma County Estate Planning Attorney to Avoid Probate

Drafting a new deed for your home is not a task that you should undertake on your own. A transfer-on-death deed should be a part of a complete estate plan put together by a trusted adviser. If you are looking for an experienced estate planning attorney, contact online Charles D. Stark in Sonoma County or call 707.527.9900. He can assist you in all of your estate planning needs.

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