Transfer on death deed or living trust: which avoids probate better in California?

Homeowners who want to spare their family a probate case usually narrow the choice to two tools: a revocable transfer on death deed, often called a TOD deed, or a revocable living trust. Our estate planning page explains why a home alone often pushes a California estate into probate. This page compares the two tools under the current text of Probate Code sections 5600 to 5698, which were amended effective January 1, 2022 and again effective January 1, 2024, and the trust and property tax statutes that apply to a trust.

How does each one pass the house, step by step?

The TOD deed path, from signing to the beneficiary's paperwork after death:

1. Fill in the statutory form. The deed must be substantially in the form in section 5642, name each beneficiary by name (section 5622), and describe the property by its legal description. The form warns not to add conditions or instructions.
2. Sign before two witnesses and a notary. The deed is not effective unless the owner signs and dates it, two witnesses who were present at the same time sign it, and the owner's signature is acknowledged before a notary (section 5624).
3. Record it within 60 days. The deed is not effective unless it is recorded on or before 60 days after the notarization (section 5626). In Los Angeles County that means the Registrar-Recorder/County Clerk. The owner does not have to deliver it to the beneficiary, and the beneficiary does not have to accept it during the owner's life.
4. Nothing changes during life. The owner keeps full ownership, can sell, borrow against or give away the property, and remains subject to the owner's own creditors; the beneficiary gets no right in the property (section 5650).
5. At death, the beneficiary does the paperwork. The statutory form lists the steps: record evidence of the death, file a change in ownership statement with the county, serve notice on the heirs with a copy of the deed and the death certificate (section 5681), record an affidavit that the notice was served (section 5682), and notify the State Department of Health Care Services if the owner received Medi-Cal.

The trust path works differently. The owner signs the trust, then signs and records a deed moving the house to the trustee, as our guide to putting your house into a living trust in Los Angeles County describes. At death the successor trustee manages and distributes the house under the trust's terms, files the county's change in ownership statement within 150 days (Revenue and Taxation Code section 480(b)), and serves a notice on beneficiaries and heirs within 60 days (Probate Code section 16061.7).

How do the two compare?

What changes the answer?

Joint tenancy and community property with right of survivorship

If title is held in joint tenancy or as community property with right of survivorship when the owner dies, a TOD deed is void and survivorship controls (section 5664). The statutory form spells out the result: if you are the first co-owner to die, the deed has no effect; if you are the last, it takes effect. A TOD deed transfers only the signer's share, so a co-owner who wants a TOD beneficiary must sign and record a separate deed.

More than one beneficiary, or a beneficiary who dies first

Two or more beneficiaries take as tenants in common in equal shares, and the share of a beneficiary who does not survive the owner lapses and passes to the others in equal shares (section 5652(a)). If every beneficiary dies first, the deed has no effect. A trust can say something different, such as passing a share to a beneficiary's children.

Debts and Medi-Cal

A TOD beneficiary is personally liable for the owner's unsecured debts, including funeral and last illness expenses, up to the value of the property received less liens (sections 5618, 5672 and 5674). Signing and recording a TOD deed is not a lifetime transfer for Medi-Cal eligibility, but the property is subject to the State Department of Health Care Services' claims to the extent the law allows (section 5654). The deed also transfers the property without any warranty of title (section 5652(e)).

Capacity and pressure

An owner needs the capacity to contract to make or revoke a TOD deed (sections 5620 and 5630). A beneficiary who also signs as a witness is presumed to have procured the deed by duress, menace, fraud or undue influence (section 5625(c)), and the form itself tells owners who feel pressured not to sign.

Changing your mind

A TOD deed can be revoked at any time by a recorded revocation signed, witnessed and notarized like the deed, by a later recorded TOD deed, or by recording a sale, gift or transfer to a trust before death (sections 5628, 5632 and the form). It cannot be revoked by will, which matters if you are relying on a handwritten will to change your plans.

Deeds signed before 2022

The 2021 revisions to this part, which amended the signing rules in section 5624 among others, do not apply to a TOD deed or revocation signed before January 1, 2022 (section 5600(d)). An older deed should be read under the rules that applied when it was signed.

A worked example

For example, imagine a hypothetical widower in Glendale who owns a condominium in his name alone, has two adult daughters and a modest bank account with a named beneficiary. He wants the condo to go to both daughters without probate.

A TOD deed fits his property, because a residential unit in a common interest development is covered by section 5610. He fills in the statutory form with both daughters' full names, signs it in front of two neighbors who are not beneficiaries and a notary, and records it within 60 days. If he later becomes unable to manage his affairs, though, the deed does nothing; his daughters would need a power of attorney to act for him. At his death, one daughter records the affidavit of death, files the change in ownership statement, serves notice on his heirs and records the affidavit of notice. If he had also bought a second rental building or wanted to hold a daughter's share in trust, a living trust would cover what the deed cannot.

The example does not decide which tool is right for him; that turns on his health, his other property and his family.

Common mistakes with TOD deeds and trusts

• Missing the 60-day recording deadline. A TOD deed recorded on day 61 has no effect (section 5626).
• Using a beneficiary as a witness. It creates a presumption of undue influence (section 5625(c)).
• Writing "my children" instead of names. The statute requires each beneficiary to be identified by name (section 5622).
• Assuming the deed works while title is in joint tenancy. If you die first, the deed is void (section 5664).
• Signing a trust but never deeding the house to it. The house then passes through probate, with the fees shown in how much probate costs in California.
• Forgetting the after-death paperwork. A TOD beneficiary who does not serve the heirs' notice can be responsible for damages caused by the failure (section 5681(g)).

What to do this week

1. Get a copy of your current deed and note exactly how title is held.
2. Check whether your property fits the TOD deed definition: one to four residential units, a condominium or similar unit, or a stock cooperative interest.
3. Write down the full names of the people you want to inherit and what should happen if one dies before you.
4. List your other assets and how each passes: trust, beneficiary designation, joint title or your name alone. If the total is modest, compare California's small estate procedures.
5. If you already recorded a TOD deed, find it and check the date you signed it.
6. Put an incapacity plan in place either way; see advance health care directive or power of attorney.

Frequently asked questions

Does a TOD deed avoid probate?

Yes for the property it covers. The statutory form says the property transfers to the named beneficiary without probate when the owner dies, and the heirs' notice in section 5681 says the same.

Can the beneficiary sell the house right after the death?

Section 5682 gives a buyer or lender the protection of a final probate distribution order only if they act in good faith and for value and both the affidavit of death and the affidavit of notice have been recorded. A contest filed with a lis pendens within 120 days after the notice affidavit is recorded can void the deed (section 5694).

How long do heirs have to challenge a TOD deed?

The heirs' notice warns that they have 120 days from the date of the notice to file a fully effective challenge (section 5681(b)). A contest cannot be filed before the owner's death (section 5692) and is brought in the county where the estate would be administered (section 5690(b)). Contested matters are litigation, which our civil litigation page describes.

Can I name my trust as the TOD beneficiary?

Yes. Section 5608 allows a natural person, a trust or a legal entity to be named, and the form says to give the trust's full name, the trustee's name and the date on the trust's signature page.

What happens to TOD deeds after 2031?

Section 5600(c) repeals the TOD deed law on January 1, 2032 unless a later statute extends it, but the repeal does not affect a deed signed before that date or the owner's right to revoke it by a recorded revocation form.

Does a TOD deed help with estate or gift taxes?

No. The statutory form answers that question directly, and it also says the deed does not affect Medi-Cal eligibility.

What does a trustee have to tell the family after a death?

A trustee must serve a notification on beneficiaries and heirs within 60 days, with a warning about the contest deadline; our page on the trustee's notice and the 120-day deadline explains it.

How can Glendale Law help?

We help homeowners decide between a TOD deed and a trust, prepare the documents, and record them correctly. Before you sign anything, our article on questions to ask before hiring an attorney can help you prepare. Call (818) 244-9000 or request a consultation.