The California Transfer on Death Deed (T.O.D.) is something you may have heard about. If executed correctly, the California Transfer on Death Deed (T.O.D.) allows property to be transferred to named beneficiaries upon death of current owner. It sounds so simple. It sounds simple in theory. It can be more difficult than you might think.
Because the law requires that there be a 120-day waiting period before property can be sold, the transfer process may prove more complicated than it seems. The waiting period must be accompanied with a specific document that serves as notice to the deceased’s estate. It must include both a copy and the death certificate of the decedent. In the county where the property is located, an affidavit must be filed verifying that the heirs were notified.
The assets of the deceased, including checking and savings accounts, will be inaccessible during this period. The beneficiary must pay the mortgage, property taxes, and any other debts associated with the property with their own money. Many people find that paying the mortgage and the mortgage of their deceased is an unsustainable financial burden.
There are some additional pitfalls to be aware of when you execute a Transfer on death deed.
Joint Title Replaces a Transfer on Death Deed
If you are jointly owner of a property with another person, you will die as the sole owner, even if you have a Transfer on Deed properly recorded. Most married couples have property in joint title, or as community property. These will override any transfer on death deeds that one spouse may record.
Problems with a Minor Beneficiary
A court-appointed custodian must be appointed to manage your property until the minor turns 18. Your child will be the new owner of the house when he or she turns 18. Let’s face it, not many 18-year olds are prepared for the responsibilities that come with home ownership.
Selling a Property May Be Difficult
Title companies often hesitate to insure clear title until three year after the transfer date if title is transferred by a Transfer on Death Deed. Your home can’t be sold or mortgaged after this time.
Heirs at Law Could Put a Wrench in Your Plans
If you die, there may be relatives or people who are distantly related to you that have a right on the property. These people are called “Heirs at Law”. This can be biological or adopted children, siblings, parents, aunts and uncles depending on who is left behind, and even half-siblings.
This article was written by Alla Tenina. Alla is the best bankruptcy attorney Los Angeles California, and the founder of Tenina Law. She has experience in bankruptcies, real estate planning, and complex tax matters. The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.