Over the years, I’ve been asked many times whether a Transfer on Death (TOD) Deed is a good way to pass down property. These deeds were designed to simplify estate planning by avoiding probate—but in practice, they often create more problems than they solve.
I no longer recommend TOD deeds to my clients—and I don’t draft them—because they have consistently led to unhappy beneficiaries and delays with title companies. Here’s why.
What California Law Requires for a TOD Deed
TOD deeds in California come with strict technical requirements. To be valid, the deed must:
- Be signed, dated, and notarized
- Be witnessed by two individuals present at the same time
- Be recorded within 60 days after notarization
- Apply only to certain types of residential property
- Name specific, individual beneficiaries (no class gifts like “my children”)
- Substantially comply with the statutory form
- Remain revocable during the owner’s lifetime, with revocation requiring proper recording
At first glance, these requirements may seem manageable. But in practice, even small mistakes can have major consequences.
Medi-Cal Recovery and TOD Deeds
One benefit of TOD deeds is that property transferred this way is currently excluded from Medi-Cal estate recovery.
That means, when properly executed, a TOD deed can help protect a property from being pulled into the state’s recovery process after the owner’s death.
However, avoiding Medi-Cal recovery doesn’t outweigh the serious risks and complexities that can arise with TOD deeds.
What Beneficiaries Must Do After Death
Beneficiaries often assume the transfer will be automatic. In reality, several steps must be completed:
- Serve formal notice on all known heirs, including copies of the TOD deed and death certificate
- Record an Affidavit of Death for the property
- Record an affidavit confirming that notice was properly served
- Accept the property subject to any existing liens, mortgages, or encumbrances
Failure to properly complete these steps can result in personal liability to heirs who were not properly notified.
Real-World Problems with TOD Deeds
Title Company Issues
Title companies frequently refuse to insure—or require additional documentation for—properties transferred via TOD deed.
This leads to delays, increased attorney costs, and sometimes even court involvement to clear title.
Unhappy Beneficiaries
Because there is no trustee or fiduciary to oversee the process, beneficiaries can easily run into problems such as:
- Disputes about ownership
- Difficulties with notice and recording requirements
- Confusion about liabilities tied to the property
These challenges often leave beneficiaries feeling frustrated rather than relieved.
Missed Technical Steps
Minor errors like:
- Forgetting a second witness
- Recording the deed late
- Using an outdated or incorrect form
can completely invalidate a TOD deed—forcing the property into probate despite the owner’s original intent.
No Protection for Beneficiaries
Once transferred, the property is:
- Vulnerable to divorce claims
- Subject to creditor actions
- At risk from the beneficiary’s financial instability
Unlike a trust, a TOD deed offers no built-in protections.
Why a Revocable Living Trust Is a Safer Solution
Through a revocable living trust, you can:
- Name primary and alternate beneficiaries
- Avoid probate and Medi-Cal recovery
- Provide clear instructions for your loved ones
- Protect the property from creditors and lawsuits
- Plan for incapacity, not just death
- Ensure smooth title transfers without title company complications
A trust offers true flexibility, protection, and peace of mind for you and your family.
Final Thought
TOD deeds might seem like an easy solution—but in my experience, they are a fragile workaround that too often leads to confusion, frustration, and unintended consequences.
If your goal is to protect your family, avoid probate, and pass down your property the right way, a revocable living trust remains the most reliable and secure option.
Ready to Build a Stronger Legacy?
Let’s create a plan that protects your home and the people you love—with confidence.
Schedule a Consultation Here
