Possible Dangers of Transfer on Death Deeds

ALERT. Be careful when considering a Transfer on Death deed as an estate planning tool.

I had a troubling conversation today with a senior title company officer regarding Transfer on Death (TOD) Deeds. As you may know, California adopted the TOD in 2016 as a valid transfer method of passing property to others at death. Since then, many people have signed and recorded TODs thinking they have done the right thing to the beneficiaries named on the deeds.

The troubling part of the conversation was that virtually all title insurance companies have been declining to issue title insurance policies for subsequent sales of TOD properties, as they are awaiting clarification from the CA legislature on whether or not an additional questionnaire should have been signed at the time of recording the TOD.

This is a ticking time bomb that the unaware may get hit with, especially those who completed the TOD on a DIY basis.

As I always tell my clients and colleagues, it’s not enough to have title — you need to have INSURABLE title if you want to sell or transfer the property at some point in the future.

Please have any TOD deeds you or your friends and family might have recorded reviewed by a competent attorney.