Passing property along when you no longer live in it shouldn’t be a huge hassle. And that’s why an increasingly popular choice is the transfer on death deed. This is a real deed, which designates a beneficiary on the real estate title.
If you have a beneficiary in mind, and you aren’t already co-owners with rights of survivorship, the transfer on death deed is a simple option in any state that offers it. But is it perfect for every homeowner? Probably not. Let’s look at how it works — and its possible drawbacks.
This year has been an interesting one for California’s revocable transfer on death deed. Beginning in 2022, California homeowners using TOD deeds (sometimes just called TODDs) must have two adult witnesses sign the document. So, for a valid TOD deed, you must sign the document, have your signature notarized, have two witnesses, and file the deed for public recording with the county within 60 days once it’s notarized.
First, no need to panic. If your California TOD was properly recorded before Jan. 1, 2022, it will still be a valid document.
Now, let’s look at the California TOD deed in its updated form.
Since 2016, California has been offering homeowners a very simple way to transfer their homes to beneficiaries. It’s called the transfer on death deed — also written as TOD deed, TODD, or beneficiary deed. A TOD deed, where a state allows it, enables a named beneficiary to take title without the need for probate or trust administration.
Fast-forward to September 2021. California’s governor has signed Senate Bill 315 into law. This has changed the way a homeowner can create or revoke a transfer on death deed, starting in 2022.
Note: If a California TOD is executed before Jan. 1, 2022, it will be valid.
Now, what’s the difference between the current TOD law and the one that takes effect in 2022? Let’s check it.
When a person passes away, the death certificate and last
will are submitted to the county probate court. A person representative begins
the process of passing assets along as the will directs — except when other
valid legal instruments have priority. One of those instruments is the
all-important real estate deed.
Houses can be left to their owners’ chosen
beneficiaries through wills. But when someone who co-owns a house passes away, questions
may arise as to what the last will says versus what the deed says. In case of a
conflict, does the last will get the last word? Short answer: probably not. The
long answer starts with the
way the title is vested.
Survivorship Rights Vs. Tenancies in Common
When an owner dies, a properly signed and recorded deed directs
and channels the person’s property interest to its next owner, typically according
to the following rules.
Ever thought about placing some of your key assets in
instruments that bypass the probate process? In a number of states, homeowners
have the option of placing their real estate in a transfer on death deed. Think
of a retirement account that’s transferred to its designated beneficiary on
death. In the same way, with a transfer on death deed for real estate, a home
can pass to a designated person, people, or a charity automatically upon the
current owner’s death.
It’s your home. You might wish to add another person—perhaps an intimate friend or a family member. Doing this is a relatively simple action. And you have the right to do it.
sure to consider the unintended consequences. However well-intended your desire
to bring a loved one onto your real estate deed, the conveyance is fraught with
risks and potential frustrations. Be aware that:
A deed that conveys an interest in your real estate ownership (“adds someone on”) has the legal effect of giving that additional person the same bundle of rights to which you are entitled.
Once the conveyance happens, it cannot be undone except with that other additional owner’s consent.
As of January 1, 2016, owners of residential real
property in California have access to a new estate planning tool: the Simple
Revocable Transfer on Death Deed (TODD). Find the law in the California Probate
Code, starting at section 5600.
As of September 1, 2015, owners of real property in Texas gained access to the statutory transfer on death deed (TODD). Modeled after the Uniform Real Property Transfer on Death Act and located at Chapter 14 of the Texas Estates Code, the Texas Real Property Transfer on Death Act governs the use of transfer on death deeds in the State of Texas.
Real estate is often one of the most significant
assets to consider in a comprehensive estate plan. There are several ways to
distribute the property after the owner’s death. Some of the more common
options are wills, trusts, joint ownership, or transfer on death (TOD) deeds. Note:
unless identified otherwise, all definitions originated with Black’s Law Dictionary, Eighth Edition.
Ohio Revised Code 5302.23(B)(5) contains the rules for revoking a recorded transfer on death designation affidavit. In short, it states that the owner of real estate previously identified as a transfer on death interest may revoke or change a beneficiary designation at any time before the owner’s death, without the consent of that transfer on death beneficiary. Simply execute and record a new transfer on death designation affidavit, including all information from the prior form, but stating the revocation or change where appropriate.