Berge & Berge, LLP Blog

Thursday, February 19, 2015

Proposed Legislation Seeks to Make Transferring Homes Easier

Will my heirs automatically own my home after my death?

California homeowners can easily deed their homes to loved ones while alive, but the transfer becomes a challenge after death.  Probate is a costly and often confusing process that can be quite time consuming.

Recently introduced legislation would create a Revocable Transfer on Death (TOD) Deed  that would allow families to avoid probate. Homeowners could execute the deed naming a beneficiary who would obtain title to the property at the owner's death. Other states allow such transfers, and the California Law Revision Commission recommended that it be considered here.

Much like other payable on death transfers, such as bank accounts, certificates of deposit or brokerage accounts, a TOD deed simplifies matters. The homeowner maintains control over the property during his or her lifetime and can revoke the deed at any time prior to death. The deed does not provide the beneficiary any interest in the property until the owner passes, so there are typically no tax consequences.

Usually, the laws governing TOD deeds require that the deed be recorded; this is ordinarily done in the county where the real estate is located. There is a recording fee, but there should not be any real estate transfer taxes because the TOD deed does not immediately transfer ownership.

For now, TOD deeds are not an estate planning option in California. Drafting a will, creating trusts and utilizing other tools require careful consideration. It is important to understand the various methods for transferring your assets after your death.

If you have questions about your estate plan, the San Jose and Santa Clara County CA estate planning and elder law attorneys at Berge & Berge can help. We practice exclusively in these areas and have the experience and knowledge to guide you. Call us today at (408)985-9918.

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