Beginning January 1, 2016, California joined many other states across the country in allowing transfer-on-death deeds. In years past, people who wanted to pass real property to another person without the necessity of probate typically used joint tenancy deeds. For example, a parent might add an adult child’s name as a joint tenant to a real estate deed to make sure the child inherited the property once the parent passed away.
With a transfer-on-death deed, a property owner no longer has to add a joint tenant to a piece of property during the first owner’s lifetime. Instead of joint tenants, the individuals named on the transfer-on-death deed become intended beneficiaries who receive no ownership rights during the owner’s lifetime.
Requirements for Transfer-on-Death Deeds
There are specific rules for transfer-on-death deeds under the new law. A transfer-on-death deed can only be used for:
- Residential property with one to four units
- Condominiums
- Agricultural property consisting of forty or fewer acres (must also contain at least one house on the property)
This means transfer-on-death deeds are not permitted for commercial properties, vacant land, large agricultural properties, or apartment buildings with more than four units.
Furthermore, a transfer-on-death deed must satisfy several specific conditions. It must be in writing, signed by the property owner, and notarized. A transfer-on-death deed must also name specific beneficiaries by name. Once these requirements are met, the deed must be recorded with the county recorder within 60 days.
Benefits of Transfer-on-Death Deeds
Transfer-on-death deeds offer many benefits. Because the intended beneficiary does not gain an ownership interest in the property until after the owner’s death, the owner retains complete rights over the property. In fact, the owner can revoke the transfer-on-death deed at any time. This eliminates much of the potential of abuse found in some joint tenancies, in which one owner might pressure or coerce the other to sell or transfer the property.
California Estate Planning Attorneys
The estate planning and probate lawyers at Yee Law Group Inc. help individuals and families safeguard their assets, plan for the future, and achieve their goals. Call Yee Law Group Inc., PC today at (916) 599-7297 to speak to a knowledgeable estate planning attorney about your case.
