California Creates New “Transfer Upon Death” Deed

January 2016

On September 21, 2015, the Governor approved Assembly Bill 139 (Gatto) AB 139 establishes a method for conveying real property upon death through a revocable transfer upon death deed. The author of AB 139 explained the purpose behind the new law: “The most common form of real property transfer upon death, a will, must pass through probate, a lengthy legal process. The process is often grueling, can take up to a year, and often results in statutory probate fees in the thousands of dollars. Similarly, establishment of a revocable trust can cost upwards of $2,000. For seniors and individuals whose estate consists primarily of the home, the money to establish a trust is out of the question. [The] revocable transfer on death deed (revocable TOD deed) is the most simple and inexpensive transfer mechanism on the market today. Furthermore, it may be the only tool available to unmarried homeowners who wish to leave their property to a lifelong partner, family member, friend, or loved one upon death, but who cannot afford to set up a trust.” AB 139 allows an interest in certain real property to be transferred on death by recording a revocable TOD deed. The deed transfers ownership of that property interest upon the death of the owner. Some of the basic features regarding this deed are:
  • Applicable property types are one to four residential dwelling units, condominium units, or not more than 40 acres of agricultural land with a single-family residence.
  • A revocable TOD deed is not effective unless the transferor signs and dates the deed before a notary public.
  • The deed does not need to be delivered to the beneficiary.
  • The deed must be recorded 60 days or less from the time it is signed.
  • The deed may be revoked by the transferor at any time.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.