Transfer-on-Death Deeds in California: What Heirs Should Know

A revocable transfer-on-death (TOD) deed is an estate planning document that lets a California homeowner name a beneficiary to receive the house at death without a probate court. The deed has no effect while the owner is alive, and it carries real consequences for the mortgage and the property taxes that heirs should understand before the transfer happens. This guide explains how TOD deeds work, what the beneficiary actually receives, and what to do after the owner passes away.

What Is a Transfer-on-Death Deed?

California authorizes revocable transfer-on-death deeds under Probate Code Sections 5600 through 5698. The law applies to homeowners who die on or after January 1, 2016, and the authorization currently sunsets on January 1, 2032. During the owner's lifetime the deed has no effect: the owner keeps full ownership and control, can sell or mortgage the property, and can revoke the deed at any time. The beneficiary's interest is contingent on surviving the owner, and it lapses if the beneficiary dies first.

How a TOD Deed Is Created

A valid TOD deed must meet specific requirements. The owner must have the capacity to contract, the deed must name the beneficiary, and it must be signed and dated by the owner. For deeds executed on or after January 1, 2022, two witnesses must have been present at the same time and witnessed the signing or the owner's acknowledgment of it. The deed must also be acknowledged before a notary public and recorded before the owner's death to be effective.

How a TOD Deed Is Revoked

An owner with capacity may revoke a TOD deed at any time, but only by recording a revocation instrument executed in the same manner as the deed: signed, notarized, and recorded. A TOD deed cannot be revoked by a will, and a revocation must be recorded within 60 days of notarization to be effective. Selling or otherwise transferring the property during the owner's lifetime automatically revokes the deed, and recording a later TOD deed revokes any earlier ones.

What the Beneficiary Receives

The beneficiary receives the house subject to the existing mortgage, any recorded liens, and the owner's debts. Under Probate Code Section 5670, the beneficiary takes the property subject to the claims of the transferor's creditors, which can take priority over the gift. There is no warranty of title. In other words, a TOD deed transfers the home, but it does not transfer it free and clear, and it does not shield the property from the estate's obligations.

The Mortgage After the Owner Dies

The TOD deed does not wipe out the mortgage. The beneficiary takes the property subject to the loan, and the payments must continue. Under the federal Garn-St. Germain Act, lenders generally may not enforce a due-on-sale clause on a transfer by death to a relative, which means the loan typically continues on its existing terms rather than becoming due immediately. The beneficiary should contact the servicer with the death certificate, confirm the account, and keep the payments current so the home does not move toward default.

Property Taxes and the TOD Deed

Recording a TOD deed does not trigger a property tax reassessment while the owner is alive, because it is not a change in ownership. At the owner's death, however, the date of death is the date of the change in ownership, and the property is reassessed to current market value unless an exclusion applies. A transfer to a spouse or registered domestic partner is excluded, and under Proposition 19 a parent-child or grandparent-grandchild transfer of a primary residence can carry over the tax base, with limits and only if the recipient uses the property as their primary residence. If the beneficiary does not use the home as a primary residence, the property can be reassessed and the taxes can rise substantially.

TOD Deed vs. Trust vs. Probate

A TOD deed is one of several ways a home can pass at death. A living trust gives the successor trustee authority to manage, rent, or sell the property and provides more control over the timing and the beneficiaries. Probate puts the transfer under court supervision, with an executor or administrator appointed by the court. A TOD deed avoids probate for the named beneficiary, but it offers no ongoing management, and the beneficiary takes the property subject to the debts and liens that a trust or an estate might otherwise address first.

What Heirs Should Do After the Owner Dies

If you are the beneficiary of a TOD deed, start by confirming the deed was recorded and that you meet the surviving-beneficiary requirement. Contact the mortgage servicer with the death certificate and keep the payments and the homeowners insurance current. Review the property tax situation with a professional who understands Proposition 19, because the reassessment decision can affect the family budget for years. And if the estate has debts, consult a probate attorney about how creditor claims may affect the transfer.

Talk Through the Transfer Before the Death

If you are a homeowner considering a TOD deed, or a beneficiary trying to understand one, the questions worth answering are the practical ones: who holds the mortgage, what the payments will be, what the property taxes will do, and whether the home will be kept or sold. A real estate professional who works with inherited properties and a probate attorney can help you compare the TOD deed against a trust and against probate before a decision is locked in.

A TOD deed can be a thoughtful way to pass a home to someone you trust, but it works best when the mortgage, the taxes, and the family's plans are understood at the same time. Knowing what the deed does and does not do is the first step to using it well.