General Provisions - Effect - Probate - CA

Section § 5650

This section explains what happens when someone creates a revocable transfer on death deed. It clarifies that during the creator's lifetime, they still have full control over their property and can sell or give it away just like they always could. The deed doesn't give any rights to the beneficiary during the creator's life, and the property isn't under the beneficiary's creditors' control. Importantly, the deed doesn't actually transfer ownership or interest in the property until the creator passes away.

During the transferor’s life, execution and recordation of a revocable transfer on death deed:

(a) Does not affect the ownership rights of the transferor, and the transferor or the transferor’s agent or other fiduciary may convey, assign, contract, encumber, or otherwise deal with the property, and the property is subject to process of the transferor’s creditors, as if no revocable transfer on death deed were executed or recorded.

(b) Does not create any legal or equitable right in the beneficiary, and the property is not subject to process of the beneficiary’s creditors.

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Section § 5652

This law explains how a revocable transfer on death (TOD) deed works for transferring property when someone dies. The deed passes the person's interest in the property to their named beneficiary, but only if the beneficiary outlives the owner. If there are multiple beneficiaries, they usually share equally, unless one fails to survive or declines the interest, at which point their share goes to the others. The property remains subject to any legal limitations or obligations, such as liens or leases, present at the owner’s death or recorded shortly after. Special rules apply to stock cooperatives, where limiting conditions in their documents or unrecorded agreements still affect the transfer. If a cooperative has the right to buy back the property, they can do so, and the beneficiary gets the fair market value minus debts. Importantly, the property changes hands without any guarantees about its title.

(a) A revocable transfer on death deed transfers all of the transferor’s interest in the property on the transferor’s death according to the following rules:

(1) Subject to the beneficiary’s right to disclaim the transfer, the interest in the property is transferred to the beneficiary in accordance with the deed.

(2) The interest of a beneficiary is contingent on the beneficiary surviving the transferor. Notwithstanding Section 21110, the interest of a beneficiary that fails to survive the transferor lapses.

(3) Except as provided in paragraph (4), if there is more than one beneficiary, they take the property as tenants in common, in equal shares.

(4) If there is more than one beneficiary, the share of a beneficiary that lapses or fails for any reason is transferred to the others in equal shares.

(b) Property is transferred by a revocable transfer on death deed subject to any limitation on the transferor’s interest that is of record at the transferor’s death or that is recorded no later than 120 days after the affidavit required by subdivision (c) of Section 5682 is recorded, including, but not limited to, a lien, encumbrance, easement, lease, or other instrument affecting the transferor’s interest, whether recorded before or after recordation of the revocable transfer on death deed. The holder of rights under that instrument may enforce those rights against the property notwithstanding its transfer by the revocable transfer on death deed. An enforceable restriction on the use of the transferred property does not affect the transfer of title to the property by a revocable transfer on death deed.

(c) Notwithstanding subdivision (b), an interest in a stock cooperative is transferred by a revocable transfer on death deed subject to any limitation on the transferor’s interest that is expressed in the governing documents of the stock cooperative or in a written agreement between the stock cooperative and the transferor, without regard for whether or not those instruments are recorded.

(d) If a stock cooperative exercises an option to purchase property transferred by a revocable transfer on death deed on the transferor’s death, the result is as follows:

(1) The property is transferred to the stock cooperative rather than the beneficiary.

(2) The purchase price is paid to the beneficiary. Unless the law or the governing documents of the stock cooperative provide otherwise, the purchase price is the fair market value of the property, less the amount of any liens or encumbrances on the property at the time of the owner’s death and less any amount that the decedent owed to the stock cooperative.

(e) A revocable transfer on death deed transfers the property without covenant or warranty of title.

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Section § 5654

If someone uses a revocable transfer on death deed to transfer their property after they die, it's not counted as transferring the property while they're still alive, especially for health care eligibility purposes. However, if the property is transferred this way, the State Department of Health Care Services can make claims against it if the law allows.

(a) For the purpose of determination of eligibility for health care under Chapter 7 (commencing with Section 14000) or Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code, execution and recordation of a revocable transfer on death deed is not a lifetime transfer of the property.

(b) Property transferred by a revocable transfer on death deed is subject to claims of the State Department of Health Care Services to the extent authorized by law.

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Section § 5656

This law explains how certain property taxes and transfer taxes apply to revocable transfer on death deeds. When such a deed is created, recorded, or revoked, it doesn't count as a change in ownership, so no extra taxes or reports are needed at that time. However, when the property actually changes hands after the original owner's death, it is considered a change in ownership for tax purposes.

For the purpose of application of the property taxation and documentary transfer tax provisions of the Revenue and Taxation Code:

(a) Execution and recordation of, or revocation of, a revocable transfer on death deed of real property is not a change in ownership of the property and does not require declaration or payment of a documentary transfer tax or filing of a preliminary change of ownership report.

(b) Transfer of real property on the death of the transferor by a revocable transfer on death deed is a change in ownership of the property.

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Section § 5658

This law allows a court to change a revocable transfer on death deed for a charitable gift. The court can do this if the charity does not accept the gift or if the charity no longer exists because it was dissolved or merged with another organization before the person who made the gift passed away. The court can make these changes if the estate administrator or someone with an interest asks, or it can decide to do so on its own.

A court in which the transferor’s estate is being administered may, on the petition of the personal representative or interested person, or on its own motion, apply the doctrine of cy pres to reform a revocable transfer on death deed that was made by the transferor for a charitable purpose, in either of the following circumstances:

(a) The beneficiary does not accept the gift.

(b) The beneficiary is a legal entity that dissolved or was merged into another entity before the transferor’s death.

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Section § 5659

If there's a mistake or something unclear in a revocable transfer on death deed, it won't make the deed invalid. As long as a court can figure out what the person who made the deed intended, it can still be enforced. The same rules that apply to fixing errors in other deeds also apply here.

An error or ambiguity in describing property or designating a beneficiary does not invalidate a revocable transfer on death deed if the transferor’s intention can be determined by a court. The general law that governs judicial construction or reformation of an error or ambiguity in a deed applies to a revocable transfer on death deed.

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