Here’s a question I hear all the time: “I want to avoid probate for my house. Should I use a California TOD deed or a living trust?”
This is a common question, and the right answer depends on your needs. To help you decide, let’s take a closer look at both options and compare how they work.
A California Transfer on Death (TOD) deed lets you pass your home without probate. However, it is not always the best option and may cause complications in some situations.
In the following sections, this guide explains how California TOD deeds work, their advantages and disadvantages, and how to decide if one fits your situation.
What Is a California TOD Deed?
A California TOD deed (officially called a “revocable transfer on death deed”) is a legal document that lets you name a beneficiary to receive your home upon your death.
The transfer happens automatically, without going through probate.
It works a bit like naming a pay-on-death beneficiary for your bank account, but instead, it applies to your home.
Here are some reasons why people find California TOD deeds appealing:
- You stay in complete control. The deed doesn’t give your beneficiary any rights until you die. You can sell the property, refinance it, or change your mind entirely.
- You can revoke it anytime. Changed your mind about who should get the house? You can record a new TOD deed or a revocation form. No permission needed from the beneficiary.
- It avoids probate for the property. When you die, your beneficiary records your death certificate and an affidavit, and the property transfers to them without court involvement.
- It is relatively inexpensive. Compared to setting up a living trust, a TOD deed costs much less, often just a few hundred dollars, including recording fees, though actual costs vary by attorney, region, and complexity.
California authorised TOD deeds in 2016. The law was updated in 2022 to help prevent fraud and elder abuse. Current law runs until January 1, 2032; properly executed deeds before then remain valid.
What Types of Property Qualify for a California TOD Deed?
Here are the specific types of property that qualify for a California TOD deed:
The property must be real estate improved with between one and four residential units, a condominium or separate interest in a common interest development, agricultural land of 40 acres or less with at least one dwelling unit, or a stock cooperative. Other types of property do not qualify.
A TOD deed cannot be used for commercial property, vacant land without a dwelling, or agricultural parcels over 40 acres. Make sure you check the title and ownership rules before you proceed.
If more than one co-owner is alive and the property is held in joint tenancy or as community property with right of survivorship, a TOD deed does not apply; survivorship rules will control. Only property held in your name alone, with no survivorship rights, can be passed by a TOD deed.
The Strict Requirements for a Valid California TOD Deed
Many people struggle with strict California TOD deed requirements. If you do not follow them exactly, your deed might not work.
For TOD deeds executed on or after January 1, 2022, here’s what you must do:
- Use the proper statutory form. The deed must be in the statutory form or substantially comply with the form set forth in California Probate Code Section 5642. This isn’t the place to get creative.
- Sign and date the deed. You (the property owner, called the “transferor”) must sign and date the document.
- Have two witnesses sign. Two adult witnesses must be present at the same time and watch you either sign the deed or acknowledge your signature. The witnesses cannot be the named beneficiary.
- Have it notarised. The deed must be acknowledged before a notary public.
- Record the deed within 60 days. This is where many people make mistakes: you must record the TOD deed with the county recorder in the county where the property is located within 60 days of notarization. (Miss this 60-day window and the deed dies.) If you miss this deadline, the deed generally has no effect and may not transfer the property as intended.
- Have contractual capacity. This is at least as high a standard as what’s required to enter into a contract. In general, you must understand the nature and consequences of signing the TOD deed and the rights and obligations it creates, and the deed can be challenged on the same grounds as other property transfers, including lack of capacity, undue influence, fraud, or duress.
Missing any of these steps may send your family to probate court—the very thing you are trying to avoid. Use the checklist above to ensure all requirements are met.
Now that you know the steps required for a valid TOD deed, let’s see who can be named as a beneficiary and what limits California law sets.
Who can be a Beneficiary Under a TOD Deed in California?
As of the 2022 amendments (and as of December 2025), the California Probate Code allows you to name one or more of the following as beneficiaries:
- Natural persons (individuals), identified by full legal name
- Trusts, identified by the trust’s name and date, and the trustee’s name
- Legal entities (such as an LLC or corporation), if and to the extent permitted by statute, identified by their exact legal name
Each beneficiary must be specifically named; you cannot use general terms such as “my children.” Naming multiple beneficiaries means each receives an equal share by law; unequal shares are not permitted.
This limitation is important to understand before you use this strategy.
The Hidden Dangers of the California TOD Deed
Now let’s talk about the risks. These are the reasons I’m cautious about recommending TOD deeds for many families.
What Happens If Your Beneficiary Dies First?
If the person you named as beneficiary dies before you do, their interest in the property lapses; it simply disappears. The property does not automatically pass to their children or anyone else. Instead, it will likely end up in your probate estate, defeating the purpose of the TOD deed.
A living trust lets you easily add backup beneficiaries and contingency plans, unlike a TOD deed. If a beneficiary dies first, you must record a new deed. Next, consider the risk of debts.
Your Beneficiary May Be Personally Liable for Your Debts
Here’s something that surprises most people: When property passes through a California TOD deed, the beneficiary may be personally liable for your unsecured debts. Under Probate Code Section 5672, creditors who could have made claims against you can pursue your beneficiary, up to the fair market value of the property received.
The beneficiary receives the property with existing liens and may face creditor claims for up to three years.
TOD Deed: Zero Protection If You Become Incapacitated
A California TOD deed only takes effect when you die. It does nothing if you become incapacitated, and this has crucial implications for your planning.
Suppose you have a stroke and can no longer manage your affairs.
The TOD deed does not authorise anyone to pay your mortgage, deal with property taxes, maintain the house, or make decisions about selling if you need the proceeds for your care. Your family might need to go to court and establish a conservatorship, a time-consuming and expensive process.
No Protection for Your Beneficiary’s Inheritance
When property passes through a TOD deed, it goes to your beneficiary outright, with no strings attached. That might sound like a good thing until you consider that if your beneficiary divorces, faces creditors, or is financially irresponsible, the inheritance could be lost to those issues.
A TOD deed provides no way to protect your beneficiary’s inheritance after the transfer. To see if this fits your goals, let’s compare it to what a revocable living trust can do in similar situations.
California TOD Deed FAQ's
A Transfer on Death (TOD) deed is a simple document that transfers a specific parcel of real property directly to a named beneficiary at death, avoiding probate for that asset. A revocable living trust is a broader estate planning vehicle that can hold many types of assets, provides for management during incapacity, and allows customized distribution rules after death. TOD deeds are cheaper and simpler; trusts are more flexible and comprehensive.
No. A California TOD deed applies only to property located in California. If you own out of state real estate, you must follow the laws of each state where the property is located. Some states have similar TOD or transfer on death statutes, others do not. Consult an attorney versed in the laws of those states to coordinate your plan.
A living trust names a successor trustee who can step in and manage trust assets if you become incapacitated, avoiding a court conservatorship. A TOD deed offers no incapacity protection because the property remains in your name while you are alive. If incapacity planning is a concern, a trust is a more effective tool.
You can revoke or change a TOD deed during your lifetime. Revocation requires recording a Revocation of Revocable TOD Deed form (notarized, witnessed, and recorded). Alternatively, recording a new TOD deed that names different beneficiaries typically supersedes the earlier deed. Always follow the statutory formalities and record changes to ensure they take effect.
Both methods generally allow beneficiaries to receive a step up in basis for capital gains purposes at the owner’s death. Property tax reassessment is governed by California rules (including Prop 19) and depends on the relationship and whether the heir makes the property their primary residence. The transfer method itself does not change reassessment rules. Consult a tax professional for specific advice on high value properties or complex tax situations.
Yes, California provides a statutory form you can use, but errors are common and can be costly. A missed witness, incorrect legal description, or failure to record properly can defeat your intent. For most homeowners, having an attorney review or prepare the deed provides valuable protection against avoidable mistakes.
Review your estate plan every three to five years or after major life events (marriage, divorce, birth, death, a major change in assets, or a move to another state). Also review when laws change. Regular reviews help ensure your documents reflect current wishes and legal rules.
Comparing a living trust to a California TOD deed.
A revocable living trust is different. Creating one forms a legal entity to hold your assets. You usually name yourself as trustee to stay in control and select a successor to step in if you become incapacitated or after your death.
Here are 6 reasons why many California homeowners prefer a trust over a TOD deed:
- Avoids probate for all funded assets, not just one property. A trust can hold your home, bank accounts, investments, and other assets. Everything properly titled in the trust avoids California probate.
- Provides incapacity planning. If you become incapacitated, your successor trustee can immediately step in to manage trust assets, pay bills, maintain property, and handle investments without any court involvement.
- Offers flexibility for complex situations. A trust can include detailed instructions, such as backup beneficiaries, staggered distributions, special provisions for minor children or beneficiaries with special needs, and asset protection features.
- Maintains privacy. Unlike probate proceedings, which are public records, trust administration is private.
- Can protect beneficiaries’ inheritances. A trust can hold assets for beneficiaries rather than distributing them outright, potentially shielding the inheritance from creditors, divorces, or poor financial decisions.
- Avoids multiple probates. If you own property in more than one state, a single trust can avoid separate probate proceedings in each state.
The main downside?
A trust costs more upfront, often in the range of $1,500 to $5,000 or more, depending on complexity, the attorney, and the region. But when you compare that to California’s statutory probate fees, which can easily exceed $46,000 for a $1 million estate, the trust often pays for itself many times over.
California TOD Deed vs. Living Trust: Side-by-Side Comparison
| Avoids Probate | Yes, for the single property named | Yes, for all properly funded assets |
| Incapacity Planning | No | Yes, successor trustee can manage assets |
| Backup Beneficiaries | No (interest lapses if beneficiary predeceases) | Yes, unlimited contingencies possible |
| Unequal Distributions | No (must be equal shares) | Yes, any distribution scheme |
| Asset Protection for Heirs | No (outright transfer) | Yes, can hold assets in trust |
| Privacy | Partial (deed recorded, beneficiary disclosed) | High (trust terms remain private) |
| Typical Cost | Often a few hundred dollars (for example, around $200–$500, varying by attorney, region, and complexity) | Often in the low thousands (for example, around $1,500–$5,000+, varying by attorney, region, and complexity) |
| Beneficiary Debt Exposure | Yes, personally liable for transferor’s debts | Trust can direct debt payment before distribution |
When a California TOD Deed Makes Sense
Despite its limitations, a California TOD deed can be the right choice in certain situations:
- Simple estate with one major asset. If your home is your primary asset and you have relatively few other holdings that would require probate, a TOD deed might be sufficient.
- Straightforward beneficiary situation. You want to leave the property to one person (or a few people in equal shares) with no conditions or contingencies.
- Limited budget. You simply can’t afford a full trust-based estate plan right now, and in many cases, a TOD deed may be better than having no plan at all, depending on your circumstances and after consulting with a qualified attorney.
- Property you may sell soon. If you’re planning to sell the property in the near future anyway, a TOD deed is simpler than transferring to a trust and then selling from the trust.
- Secondary property in a trust-based plan. Some people use a trust for their primary residence and accounts, but use a TOD deed for a vacation cabin or rental property for convenience.
When You Should Choose a Living Trust Instead
A living trust is generally the better choice when:
- You have multiple assets beyond just your home that you want to protect from probate.
- You’re concerned about incapacity and want someone to be able to manage your affairs seamlessly if you can’t.
- You have minor children who would inherit and need a trustee to manage assets on their behalf.
- You have a blended family where you need to balance providing for a spouse while ensuring children from a prior relationship ultimately inherit. Consider whether your children from a first marriage will still inherit if you remarry.
- A beneficiary has special needs, and receiving an outright inheritance could disqualify them from government benefits.
- You want to protect inheritances from beneficiaries’ creditors, divorces, or financial mismanagement.
- You own property in multiple states and want to avoid separate probate proceedings in each jurisdiction.
- You want unequal distributions or complex distribution schemes that a TOD deed can’t accommodate.
The Critical Importance of Funding a Trust
If you do choose a living trust, here’s something essential to understand: the trust only works for assets you actually transfer into it.
A common and costly mistake is creating a beautiful trust document but never taking the steps to “fund” it, that is, retitling assets in the trust’s name.
Lack of proper funding is the most common reason why trusts fail. An unfunded trust is essentially expensive paper. If your home is still titled in your individual name when you die, it will still go through probate, regardless of what your trust says.
An unfunded trust is essentially expensive paper.
If your home is titled in your individual name at your death, it will still go through probate, regardless of what your trust says.
Proper trust funding includes:
- Deeding your home into the trust. This requires preparing and recording a new deed transferring title from you individually to you as trustee of your trust. Transferring your own home to your own revocable trust generally does not trigger property tax reassessment in California because you are still treated as the beneficial owner for property tax purposes, but you should confirm the property tax consequences of any transfer with a qualified tax professional or attorney.
- Retitling bank and investment accounts. Contact your financial institutions to change account ownership to the trust, or in some cases, name the trust as the beneficiary.
- Updating beneficiary designations. Review life insurance, retirement accounts, and other assets with beneficiary designations to ensure they align with your overall plan.
- Transferring other significant assets. Business interests, valuable personal property, and other holdings should be addressed.
What About Property Taxes?
A common concern is whether using a TOD deed or trust will trigger property tax reassessment.
Here’s the general rule (specific situations should be reviewed with a qualified tax professional or attorney):
- Executing a TOD deed does not cause property tax reassessment. You remain the owner until death, and no change of ownership occurs for property tax purposes when you sign the deed.
- Transferring your home to your own revocable trust also does not trigger reassessment, because you’re still considered the beneficial owner for property tax purposes.
The reassessment question arises when property actually transfers to beneficiaries after death. Under Proposition 19 (effective February 2021), the rules for parent-to-child transfers became more restrictive.
In general, transfers of a primary residence may qualify for an exclusion from reassessment only if the child uses the property as their primary residence and meets certain value limits.
This is true whether the property passes by a TOD deed, trust, probate, or any other method, and the detailed application of these rules can be complex and fact-specific, so you should consult a qualified tax professional or attorney for advice about your particular situation.
Why Professional Help Matters
I won’t sugarcoat this: DIY estate planning is risky.
With a California TOD deed, the most common mistakes include using the wrong form, failing to get proper witnessing, missing the 60-day recording deadline, and not understanding how the deed interacts with how you currently hold title. Any of these errors can make the deed worthless.
The most common mistake with living trusts is failing to adequately fund them. But there are also issues with improper drafting, failing to include necessary provisions, and creating unintended tax consequences.
A qualified California estate planning attorney can help you:
- Evaluate whether a TOD deed, trust, or combination is right for your situation
- Prepare documents that comply with current California law
- Handle proper execution and recording
- Ensure your estate plan works as a coordinated whole
- Address issues you might not have considered
Questions to Ask Yourself
Before deciding between a California TOD deed and a living trust, consider these questions:
- Is my home my only significant asset, or do I have other property that would go through probate?
- What happens if I become incapacitated? Who will manage my property and finances?
- Are my beneficiaries in stable situations, or could an outright inheritance create problems for them?
- What if my primary beneficiary dies before me? Do I have a backup plan?
- Do I have minor children or grandchildren who might inherit?
- Is my family situation simple, or are there complexities (blended family, estranged relatives, special needs)?
- How important is privacy to me?
- Am I willing to invest more up front to potentially save my family from high costs and hassle later?
Next Steps: Getting Started
If you’re ready to take action, here’s how to prepare:
Step 1. Gather your documents. Locate your current deed (showing how you hold title), recent mortgage statements, and a list of your major assets.
Step 2. Think about your goals. Who do you want to receive your property? What happens if that person can’t inherit? Do you need someone to step in if you’re incapacitated?
Step 3. Consider your beneficiaries’ situations. Are they minors? Do they have creditor issues, an unstable marriage, or special needs?
Step 4. Schedule a consultation with an estate planning attorney. Many offer free or low-cost initial consultations. Come prepared with your documents and questions.
Step 5. Ask about flat-fee arrangements. Many estate planning attorneys offer fixed pricing so you know exactly what to expect.
The Bottom Line
A California TOD deed can be a useful, affordable tool for transferring your home outside of probate, but only in the right circumstances.
It works best for simple situations with straightforward beneficiary arrangements and limited assets.
For many California homeowners, a revocable living trust provides significantly more protection, flexibility, and peace of mind. Yes, it costs more upfront. But when you factor in California’s steep probate fees, the lack of incapacity planning with a TOD deed, and the inability to protect beneficiaries’ inheritances, a trust often proves to be the wiser investment, depending on your goals, asset mix, and advice from a qualified attorney.
The most important thing is not to do nothing. Every day that passes without an estate plan is a day your family is unprotected. Whether you choose a California TOD deed, a living trust, or a combination of both, taking action now is an act of love for the people who matter most to you.
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Disclaimer: This article provides general information about California estate planning law and is not legal advice for your specific situation. Estate planning laws are complex and change frequently. The information here reflects California law as of December 2025, and laws affecting estate planning, including TOD deeds and property tax rules, may change after that date, potentially making portions of this article inaccurate. Consult with a qualified California estate planning attorney before making decisions about your estate plan.
