October 29th, 2018 at 10:35 am

Question: Last week you discussed the revocable Transfer on Death (TOD) deed which generally allows homeowners to leave their homes to their loved ones, without the hassles of having a will or trust, or going through probate. You said that a homeowner need only fill out, sign, notarize, and record the TOD deed to leave the property to a designated beneficiary when the homeowner dies. Can a homeowner file a TOD deed only when he or she is the sole person on title to the property, or even when he or she is a joint owner with someone else? 
Answer: A homeowner can file a TOD deed even when he or she is a joint owner with someone else, but the TOD deed may have no legal effect depending on the circumstances. Let’s say, for example, that Mr. X owns property together with Ms. Y as joint tenants (which has a right of survivorship). In our example, Mr. X files a TOD deed leaving his interest in the property to Mr. Z. So if Ms. Y dies before Mr. X, then Ms. Y’s interest will go to Mr. X by right of survivorship. Then when Mr. X dies, his TOD deed will be effective in transferring his interest to Mr. Z. However, if Mr. X dies before Ms. Y, then Mr. X’s interest will go to Ms. Y by right of survivorship, and Mr. X’s TOD deed will have no legal effect.

Alternatively, Mr. X could hold title with Ms. Y as tenants in common, which has no right of survivorship. In that situation, Mr. X’s TOD deed will be effective in transferring his proportionate interest in the property to Mr. Z, regardless of whether Mr. X or Ms. Y dies first.

For married couples holding title as just “community property,” there is no right of survivorship. So a spouse’s TOD deed will be effective. However, most married couples hold title as “community property with right of survivorship,” in which case, a spouse’s TOD deed will only be effective if the person filing the TOD deed outlives his or her spouse.

-Happy Halloween everyone! I ain’t afraid of no ghosts!

Copyright© 2018 Berkshire Hathaway HomeServices California Properties (BHHSCP). All rights reserved. Any unauthorized reproduction or use of this material is strictly prohibited. This information is believed to be accurate as of October 29, 2018. It is not intended as a substitute for legal advice in individual situations, and is not intended to nor does it create a standard of care for real estate professionals.

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