Transfer on Death Deeds in California: What You Should Know

California homeowners are often told there is a simple way to avoid probate using a transfer on death deed. On the surface, this sounds appealing. Probate in California is expensive, slow, and public, and most families want to avoid it if possible.

While transfer on death deeds do exist under California law, they are not always the best solution for most families. In fact, they often create more problems than they solve.

As a California estate planning lawyer, I often advise clients against relying on transfer on death deeds as a primary estate planning strategy. Although they can avoid probate, they can also introduce inflexibility, unnecessary risk, and unintended consequences that many families don’t anticipate.

Understanding how transfer on death deeds work, and more importantly where they might  fall short, is critical before using one to transfer your most valuable asset.

What Is a Transfer on Death Deed in California

A transfer on death deed allows a homeowner to name a beneficiary who will automatically receive the property when the owner dies. The transfer occurs outside of probate.

During the homeowner’s lifetime, the beneficiary has no ownership rights. The homeowner can sell, refinance, or revoke the deed at any time, as long as it is done properly and recorded before death.

After the homeowner passes away, the beneficiary records certain documents, including a death certificate,  and becomes the new owner of the property without court involvement.

This sounds like a perfect solution for avoiding probate. However, probate avoidance alone does not mean the strategy is safe, flexible, or well suited for real families.  California Courts Transfer on Death Deed Information

Why Probate Avoidance Alone Is Not Enough

Probate in California is often slow and expensive. In many cases, it takes twelve to twenty four months to complete and costs tens of thousands of dollars.

Probate fees are calculated based on the full value of the estate, not the equity. A home worth one million dollars can generate more than forty six thousand dollars in statutory probate fees, even if there is a large mortgage. California probate services

Because probate is so unpleasant, many homeowners look for shortcuts. The problem is that avoiding probate should not come at the expense of control, protection, and long term planning.

Transfer on death deeds solve only one issue. They do not address incapacity, creditor exposure from lawsuits or bankruptcy, blended families, minor children, or long term asset management.

Major Downsides of Transfer on Death Deeds

Lack of Flexibility

Once a transfer on death deed is recorded, the outcome can become rigid.

If you name more than one beneficiary and one of them dies before you, the surviving beneficiary may inherit the entire property. This may not reflect your original intent. Especially if you want the deceased beneficiary’s children to inherit.

If the sole beneficiary dies before you and no backup beneficiary is named, the property will still go through probate.

A living trust automatically accounts for these situations. A transfer on death deed does not.

Exposure to Beneficiary Creditors

One of the biggest risks of a transfer on death deed is creditor exposure.

If your beneficiary has creditors, lawsuits, judgments, tax problems, or divorce issues, the property can become subject to liens immediately after your death.

There is no protection layer. The property becomes the beneficiary’s personal asset outright.

A properly structured living trust can protect assets from beneficiary creditors and lawsuits, something a transfer on death deed cannot do.

No Control Over Distribution

Transfer on death deeds provide no control over how or when property is used.

• You cannot delay distribution.
• You cannot stagger inheritance.
• You cannot protect minors.
• You cannot manage special needs planning.

Once the transfer occurs, the beneficiary owns the property outright and can sell it, mortgage it, or lose it.

A living trust allows you to control distribution timelines, conditions, and purposes.

No Protection for Blended Families

Blended families are especially vulnerable when using transfer on death deeds.

If relationships change, if a spouse remarries, or if children from prior relationships are involved, transfer on death deeds can often lead to disputes and litigation. Blended family estate planning

Living trusts are specifically designed to address these family dynamics and prevent accidental disinheritance.

Risk of Invalid or Improper Filing

Transfer on death deeds must meet strict legal requirements.

• They must be properly completed.
• They must be properly signed and recorded.
• They must be recorded within strict time limits.

Small errors can invalidate the deed entirely. When that happens, the property goes straight into probate.

DIY filings are especially risky in this area.

Why Living Trusts Are the Better Solution

A revocable living trust avoids probate while also providing flexibility, protection, and long term control.

With a living trust, you can:

1. Avoid probate entirely
2. Maintain privacy
3. Control who receives property and when
4. Protect beneficiaries from creditors
5. Provide backups if a beneficiary dies
6. Plan for incapacity
7. Handle blended family concerns

A trust works not only at death, but also during your lifetime if you become incapacitated. Living trusts in Orange County

Real Estate Control Matters After Death

Real estate is often the most valuable asset a family owns.

A living trust allows you to specify whether a beneficiary may live in the home, whether the home should be sold, and how proceeds are distributed.

A transfer on death deed provides none of this guidance. How living trusts protect your legacy

When Transfer on Death Deeds Might Make Sense

There are limited situations where a transfer on death deed may be appropriate.

Examples include:

• A single homeowner
• One responsible adult beneficiary
• No creditor concerns
• No blended family
• No long term control needed

Even in these cases, a living trust often remains the safer and more comprehensive option.

Key Takeaways

• Transfer on death deeds can avoid probate but lack flexibility
• They expose property to beneficiary creditors
• They offer no control over timing or distribution
• They fail in blended family situations
• Errors can invalidate the deed
• Living trusts avoid probate and provide full control
• Most California families benefit more from a living trust

Frequently Asked Questions

Does a transfer on death deed avoid probate in California?
Yes, if completed and recorded correctly and the beneficiary survives the owner.

Can I name multiple beneficiaries?
Yes, but this can create serious problems if one beneficiary dies first.

Does a transfer on death deed protect against creditors?
No. Creditors can place liens on the property.

Can I change or revoke a transfer on death deed?
Yes, but it must be done correctly and recorded before death.

Is a living trust better than a transfer on death deed?
For most families, yes. A trust provides flexibility, control, and protection.

Final Thoughts

Transfer on death deeds appear simple, but simplicity often hides risk. While they may avoid probate, they do not protect your family, your home, or your long term goals.

A living trust provides probate avoidance without sacrificing control or flexibility. For most California homeowners, it is the smarter and safer choice.

If you own real estate in California and want to avoid probate the right way, a personalized estate plan is essential.

Schedule your free 30-minute Strategy Session today or call (949) 377-2996 with Michael Pevney, your trusted Orange County estate planning attorney.