For many, their home is their most valuable asset. This is why it is important when doing your estate planning to keep it out of probate. You have options, including transferring title into a revocable living trust, taking title either as community property or joint tenancy with right of survivorship. Recently, California, along with many other states, have adopted an alternative called transfer-on-death (TOD) deed or beneficiary deed. Here is a summary of how it works:
· Similar to opening a bank account with a payable-on-death (POD) designation, with a TOD you simply name one or more beneficiaries
· Your beneficiary will only inherit the property at your death
· Your beneficiaries will avoid probate proceedings when transferring title
· Beneficiaries have no legal rights until your death or if you own with a spouse or someone else, until they die.
· Beneficiaries do not have to sign, acknowledge or even be told about the deed
· You maintain your legal title and right to sell, give away or mortgage the property
· It is not considered a gift, so there is no federal gift tax consequence
· You can revoke the TOD deed or record another whenever you please
This is a great estate planning alternative. To discuss which option might be right for you, feel free to contact us.