Transfer on Death (TOD): What is it?

California recently became consumer friendly when AB 139 was enacted. For now, Californians are able to transfer the title of their homes to a beneficiary when they die using a TOD deed, or “transfer on death” deed.

This is great news, and makes it so much easier for many, many people to protect their biggest asset from probate: their home!

Q: Why would you want to use a TOD?

A: No need for probate of your home…and it can be a huge savings in estate planning costs.

Sounds like a win-win to me. Since I’m a firm believer in DIY (do-it-yourself) everything, being able to simply and easily transfer what is usually your biggest asset without the help of an attorney is BIG NEWS. A transfer on death deed will likely eliminate the need for a costly and time consuming probate case.

Q: Aren’t you an Estate Planning attorney? Why would you promote this?

A: Yes, and I am promoting this because I think it’s awesome. You may still want the advice of an attorney if you look at the form and think “Wha?!?” Or, you may recognize the very real chance that you have many good intentions, but won’t actually fill anything out, get it notarized, or record the TOD deed with the county. I can help you with that. But if you are motivated and organized, you can totally do this yourself. In my opinion, the more people who protect their assets and build generational wealth, the better!

Q: But what is it, really, and why should I be interested?

A: The short answer is this: a transfer on death deed (TOD) is a piece of paper (a legal instrument) that is recorded with your county (just like titles to property are), and this alleviates the need for most people to go through probate. It bypasses probate becomes the deed becomes effective upon death, allowing whomever is named on the deed to take control of your home. Probate is a hassle if you do it yourself, and can be pricey if you have an attorney do it. You should be interested in saving your heirs as much money and headaches as possible. A TOD can do that for you.

Q: Okay, but I’m not comfortable doing this myself/I don’t understand the forms/I have good intentions but know myself well enough to know I won’t actually file this myself. Now what?

A: You can schedule a call with me and we can chat. After the chat, I will fill out your forms, you will meet with a notary and myself in my office, and then I will file the forms for you at the recorder’s office.

Q. Are there limitations for using a Transfer on Death Deed?

A: Yes.┬áThis deed can only be used to transfer the following types of property: a parcel of property that contains one to four residential dwelling units (like a home, duplex … up to four), a condominium unit, or a parcel of agricultural land of 40 acres or less. So in my case, my “backyard” is a 20 acre parcel with no house on it. I’m out of luck for a TOD for that. This includes business property as well.

Other considerations: how you currently hold title in your home, community property issues, and leaving property to minors. If you are unsure about this, please do your homework. Read everything you can before you fill one out. In my opinion, this is a pretty good solution for an older, single person with no minor children. Everyone else has issues that need to be considered before jumping on the TOD bandwagon.