If you own your home in California, it may be your most valuable asset.
You may have heard that a Transfer on Death (TOD) Deed can help you avoid probate. Maybe someone described it as simple, affordable, and effective.
In many situations, that’s true.
But what many homeowners don’t realize is this: a Transfer on Death Deed by itself is not a complete estate plan. If you rely on this single document without understanding its limits, your family could face complications you never intended.
In this article, I’ll explain what a California TOD Deed does well, how it works under California Probate Code § 5642, and the five major gaps you should understand before deciding it’s “enough.”
What a California Transfer on Death Deed Does Well
Under California law, a Revocable Transfer on Death Deed allows your home to pass automatically to your named beneficiary at your death — without going through probate.
The governing statute is California Probate Code § 5642, which outlines the formal requirements for a valid TOD Deed, including:
- Strict statutory form language
- Proper notarization
- Recording within 60 days of signing
- Clear beneficiary designation
If executed and recorded properly, the property transfers by operation of law when you die. Your beneficiary typically records an affidavit of death and supporting documentation to complete the transfer.
Key Advantages
A properly prepared TOD Deed allows you to:
- Keep full ownership during your lifetime
- Sell or refinance the property
- Revoke or change beneficiaries
- Retain property tax protections (such as Prop 13 base year value, subject to current law)
The deed is fully revocable during your lifetime.
Beneficiaries also generally receive a step-up in basis for capital gains tax purposes, just as they would with other inherited property.
Avoiding probate can save time, filing fees, court oversight, and attorney involvement — especially in counties where probate backlogs are significant.
These are meaningful benefits.
But they are only part of the picture.
What a TOD Deed Does Not Do
Unlike Lady Bird Deeds (which California does not recognize), a California TOD Deed does not create an enhanced life estate. It is simply a revocable beneficiary designation for real property.
And importantly, it does not shield property from creditor claims or Medi-Cal estate recovery in the way many people assume.
In California, Medi-Cal estate recovery rules are governed by state and federal law. While recovery is generally limited to assets passing through probate, TOD property can still be subject to certain claims and statutory creditor periods. This area is nuanced and must be evaluated carefully.
A TOD Deed should never be viewed as a comprehensive asset-protection or long-term care planning tool.
5 Risks of Relying on a TOD Deed Alone
1. It Only Covers Your Home
A TOD Deed applies only to the specific piece of real property described in the deed.
It does nothing for:
- Bank accounts
- Retirement accounts
- Brokerage accounts
- Business interests
- Personal property
- Other real estate
If those assets are not otherwise coordinated (beneficiary designations, trust funding, etc.), they may still require probate.
A TOD Deed is not a substitute for an overall estate plan.
2. It Provides No Protection During Incapacity
A TOD Deed only operates at death.
If you become incapacitated due to illness, dementia, or an accident, the deed does not help your family manage your affairs.
Without:
- A durable financial power of attorney
- An advance healthcare directive
- Proper HIPAA authorizations
Your loved ones may need to pursue a conservatorship in California Superior Court.
Court involvement during incapacity is expensive, public, and time-consuming.
A deed alone does not prevent that.
3. It Does Not Control What Happens After Your Beneficiary Inherits
When your beneficiary receives the property, they inherit it outright.
That means:
- If there are multiple beneficiaries, they now co-own the property.
- If one wants to sell and another does not, conflict can arise.
- If the beneficiary is financially inexperienced, the property may be mismanaged.
There is no built-in structure for:
- Staggered distributions
- Ongoing management
- Asset protection
- Special needs planning
A trust can provide those protections. A TOD Deed cannot.
4. It Can Fail if Not Done Perfectly
California TOD Deeds are technical.
Under Probate Code § 5642, the deed must:
- Follow exact statutory language
- Be notarized
- Be recorded within 60 days of signing
If any of those requirements are not met, the deed may be invalid.
Additionally:
- If the named beneficiary dies before you and no alternate is listed, the property may end up in probate.
- If you refinance and title changes, the TOD Deed may need to be reviewed.
- If you forget to update it after life changes, unintended results can occur.
These documents are deceptively simple but legally unforgiving.
5. It Offers No Asset Protection for Your Beneficiary
Once inherited outright, the property becomes the beneficiary’s legal asset.
It may be:
- Subject to creditors
- Divided in divorce
- Reached in a lawsuit
- Used as collateral
- Lost due to financial mismanagement
If your goal is long-term protection for children or future generations, a properly structured trust provides far more protection than a TOD Deed.
When Might a TOD Deed Be Appropriate?
In California, a TOD Deed may be appropriate when:
- The home is the only major asset
- The beneficiary situation is simple
- Asset protection is not a primary concern
- The client understands the limitations
- It is used as part of a coordinated plan
It can be a useful probate-avoidance tool — but it should be selected intentionally, not casually.
Why Comprehensive Planning Matters
Think of your estate plan as a system — not a single document.
For most California families, that system includes:
- A revocable living trust (for broader probate avoidance and structure)
- A pour-over will
- Durable financial power of attorney
- Advance healthcare directive
- Proper beneficiary coordination
- Planning for incapacity
- Planning for tax and asset protection issues
Using only a TOD Deed is like locking one door while leaving the rest of the house open. It may solve one issue — but it does not address the full picture.
The Bottom Line
A California Transfer on Death Deed can be helpful.
But it is not a complete estate plan.
If your goal is to keep your loved ones out of court, minimize conflict, and provide structure and protection, your planning needs to go beyond a single recorded document.
As a California estate planning attorney, I begin with understanding your assets, family dynamics, and long-term goals. From there, we design a coordinated plan that works together — not a patchwork of disconnected documents.
Convenience is appealing.
Completeness is protective.
If you would like to review whether a TOD Deed makes sense for your situation — or whether a trust-based plan would better serve your goals — the first step is a conversation.
Protecting the people you love deserves more than a shortcut.
At Cheever Law, APC, we don’t just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love, starting with a valuable and educational Life & Legacy Planning Session. The Life & Legacy Planning Session will allow you to get more financially organized and make the best choices for the people you love. If you have already completed your estate plan, we will review that plan at your Life & Legacy Planning Session to ensure that it will work the way you intend and address any holes or gaps that may be present if circumstances have changed since you executed your plan.
To learn more about our one-of-a-kind systems and services, contact us or schedule a 15-minute introductory call today.