Refinancing the transferred property has sometimes been a challenge for beneficiaries during the first three years of ownership. However, a Revocable Living Trust would allow a homeowner to be represented by a designated trustee.īecause transferring a house via a TOD Deed is such a simple process, title insurers are cautious with them. There may be better alternatives for your loved ones.Īdditionally, though it would be a rare occurrence, if the property owner becomes incapacitated for a period prior to death, a TOD Deed does not assist with managing the real estate in question. This could potentially create financial difficulties for the person receiving the property after the death of the owner.Īfter the property owner passes away, any liens on the home from possible creditors will also be transferred to the beneficiary.Īlso, to be considered by the homeowner is the age of the beneficiary He/she must be an adult (18), or the court will need to appoint a legal representative for the transfer to take place. Beneficiary debt liabilityĪ mortgage or other debt, including a line of credit that was left unpaid by the deceased, will transfer to the TOD beneficiary. Should the suspicion of a situation such as the above have occurred, family members or close friends may, unfortunately, choose to litigate the TOD Deed in court. California legislators built in a safeguard that prohibits a beneficiary from selling a TOD property within 120 days of the transferor’s death. Opponents of TOD Deeds have expressed concerns about the risk of scammers or senior predators attempting to persuade an elderly or incompetent person to file a deed on their behalf. An affidavit must be recorded by the property recipient stating that the heirs have been properly notified of the decedent’s death, and about the TOD Deed.Īs with many laws, there are often concerns about its possible misuse. If the property’s recipient does not notify the heirs in this exact way, he or she may have to pay damages to the heirs. This new notification requirement allows traditional heirs an opportunity to contest the TOD Deed, should they so choose. To enhance the security of a TOD Deed, the California law added a requirement that the beneficiary/recipient of the specified property mail notification of the decedent’s passing to the owner’s heirs, along with a copy of the death certificate and the TOD Deed. The court, at the same time, will only make modifications where the property owner’s intentions are clear. The court is now permitted to modify what it views as an arguable TOD so that it will hold up legally in the future. Include new legal language in the California Probate Code that allows a court to adjust an existing TOD Deed that may be debatable, in its opinion. The form ‘Revocation of a Revocable Transfer on Death (TOD) Deed’ should be used for revocation without selling the property. In such cases, a new document needs to be signed with a notary observing. Notarizationsįinally, the revised law also has an impact on revoked TOD deeds. It is best to have witnesses who will not be receiving the home from the grantor to remove any accusations of undue influence on the decision to grant them the property. While an interested person in the property being transferred may be one of the witnesses, it is preferred that this is not the case. Code §5624 the TOD Deed must be witnessed by two people, both of whom must be present when the property owner signs the deed. New witness requirementsĪs stated by Cal. This was designed to allow ample time for any new amendments or rewritten language to be processed by the State Legislature without the pressures of the law expiring. Code §5600(c) Transfer on Death Deeds issued before January 1, 2021, now have a sunset date of January 1, 2032. Signed into law by California’s Governor Gavin Newsom in September of 2021, according to Cal. You can find the new revised TOD form from the clerk recorder here. A TOD Deed continues to be a plausible consideration for a property owner who wants to maintain control of their real estate for as long as they can, often until death. While the adjusted regulations tighten up the existing rules, the process remains straightforward and inexpensive. Firstly, if you are filing a new TOD Deed, be certain that you are using the updated California form, effective from January 1, 2022.
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