What is a revocable transfer on death deed?
Traditionally, if you wished to leave property to someone at the time of your death you had a few options. You could provide for the bequest in your will, put the property in trust for the intended beneficiary, or enter into joint ownership with the person you hope to transfer the property to. Now, there is a new option in the state of California: the revocable transfer on death (TOD) deed.
If you have provided for a beneficiary to inherit property through your will, he or she will be subject to the lengthy and costly probate process. While trusts are also widely used to transfer property to beneficiaries, they too can be expensive to set up and maintain. The revocable transfer on death deed is supposed to be the easy and cost-effective way to transfer property at the time of a person’s death.
The revocable transfer on death deed can be used in a number of real property scenarios. The deed can be used to transfer a residential property of up to four families, condominiums and farmland of not larger than 40 acres with a single-family dwelling. The deed must be executed before a notary public and recorded within 60 days of signing in order to be effective.
The deed can be revoked by the transferor (the person transferring the property) at any time before his or her death. A revocable transfer on death deed can be revoked by the recording of a new deed, either presently transferring the property or transferring it at death, or by the filing of a revocation form. If the transferee dies before the transferor, the deed is considered void.
If you wish to leave property to someone, but want to avoid drafting a will or creating a trust, a revocable transfer on death deed might be the best option for you. Consult with a skilled estate planning attorney to make sure the TOD is executed properly.