California Transfer on Death Deed: 2026 Rules and Property Tax

Where the law sits, and what it can transfer

Many pages cite the TOD deed as Probate Code 5600 without saying where it lives. It is Part 4 of Division 5 (Nonprobate Transfers) of the Probate Code, titled Revocable Transfer on Death Deed, sections 5600 to 5698, added by AB 139 (Stats. 2015, ch. 293). Section 5600(a) applies it to a deed made by a transferor who dies on or after January 1, 2016.

Section 5614 defines the instrument by three features: it “Makes a donative transfer of real property to a named beneficiary”, operates on the transferor’s death, and remains revocable until then. Who can sign one is in section 5620: “An owner of real property who has the capacity to contract”.

What counts as “real property” is narrower than the words suggest. Section 5610, as amended by AB 288 (effective January 1, 2024):

The beneficiary can be “A natural person, trust, or legal entity” (section 5608), identified by name (section 5622). The statutory form tells owners not to write general terms like “my children”; a trust is named with its trustee and date. Two or more beneficiaries take “as tenants in common, in equal shares”, and a beneficiary who does not survive the owner drops out, with that share going to the others (section 5652(a)). There is no way on the form to name a contingent beneficiary or unequal shares; the form’s own answer is that if that is not the result you want, “you should not use the TOD deed.”

Signing and recording: the rules SB 315 added in 2022

The deed is a short statutory form in section 5642, with “Common Questions” pages that do not have to be recorded (section 5626(d)). Its validity rests on four steps:

The witness rule is new. SB 315’s digest says the bill “would instead require the deed or revocation to be signed by the transferor, acknowledged by the transferor before a notary public, dated, and signed by 2 witnesses”. Section 5600(d) keeps the old rules for a deed or revocation signed before January 1, 2022, so a 2018 deed without witnesses is judged by the law in force when it was signed (our reading). Section 5659, also from SB 315, saves a deed with an error in the property description or beneficiary name if a court can determine the owner’s intention.

The sunset: January 1, 2032

Section 5600(c): “This part shall remain in effect only until January 1, 2032, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2032, deletes or extends that date.” The same subdivision protects what already exists: the repeal “shall not affect the validity or effect of a revocable transfer on death deed that is executed before January 1, 2032”, nor the owner’s right to revoke one with the section 5644 form.

No amendment to Part 4 after AB 288 appears in the history notes on the official code site as of October 12, 2026; the most recent notes cite Stats. 2023, ch. 62. Anyone relying on a deed signed today has until the end of 2031 for the Legislature to act on the Commission’s report; the deed itself would survive a repeal (section 5600(c)).

Revoking it, and what overrides it

Section 5630: an owner with capacity to contract may revoke “at any time”. Section 5632 requires the revocation to be executed and recorded the same way as the deed (witnesses, notary, 60 days), and “Joinder, consent, or agreement of, or notice to, the beneficiary is not required”. The form lists three ways: record a revocation form, record a new TOD deed, or sell, give away or move the property into a trust and record that deed. It also says “A TOD deed cannot be revoked by will.”

When the deed and another instrument both dispose of the house, section 5660 (as rewritten by AB 288) decides: if the other instrument is revocable, such as a living trust, the later executed one wins; if it is irrevocable, such as a sale, the other instrument wins. A later recorded TOD deed revokes an earlier one (section 5628).

Title matters most for couples. Section 5664: if at death the property is held “in joint tenancy or as community property with right of survivorship, the revocable transfer on death deed is void.” The form explains the result: if you are the first joint tenant or spouse to die, the deed “is VOID and has no effect”; if you are the last, it controls. Each co-owner can only transfer his or her own share and must record a separate deed. A deed of community property is also subject to the spousal-consent rules of Probate Code section 5010 and following (section 5666).

After the death: the beneficiary’s checklist and the 120-day windows

Most of the work under a California TOD deed falls on the beneficiary, after the death. The form lists five duties, and the statutes add the deadlines:

The notice to heirs is the step SB 315 added, and it sets the clock for everyone else. Its statutory text warns that an heir who believes the deed is invalid has “only 120 days from the date of this notice to file a fully effective challenge.” In the code itself, section 5694 ties the remedy to the affidavit: if a contest is filed and a lis pendens recorded no later than 120 days after the affidavit under section 5682(c) is recorded, the court voids the deed; after that, a court can still grant relief but cannot undo a good-faith purchaser’s or lender’s rights. No contest can be filed while the owner is alive (section 5692), except by a conservator or guardian (section 5696(b)). A beneficiary who skips notice to a known heir is liable for the heir’s damages unless he or she made a reasonably diligent effort (section 5681(g)).

The same 120-day idea appears for liens: the property passes subject to any limitation of record at death or recorded no later than 120 days after that affidavit (section 5652(b)). Until those windows close, a sale or refinance by the beneficiary carries risk for the buyer (our reading of sections 5652(b), 5682 and 5694).

Property tax: a change in ownership at death, and what Proposition 19 saves

This is the part of a California TOD deed that costs the most money, and the statute is blunt. Section 5656: executing, recording or revoking the deed “is not a change in ownership of the property”, but “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.” The form says the same in plain words: at death, “property tax law applies as it would to any other change of ownership.” The deed neither helps nor hurts here; a trust or a will would produce the same change in ownership (our reading).

A change in ownership means reassessment to market value unless an exclusion applies. For a parent and child, the exclusion is the one Proposition 19 (November 3, 2020) put into Article XIII A, section 2.1 of the California Constitution, implemented by Revenue and Taxation Code section 63.2 for transfers “beginning on and after February 16, 2021”. Its conditions, as the statute and the BOE state them:

• Family home only. The home must be the parent’s principal residence and become the principal residence of the transferee within one year (63.2(a)(1)(A)). The BOE’s answer on a rental: “the transfer of a rental home between parents and children would not qualify for the exclusion.”
• Two claims. The homeowners’ or disabled veterans’ exemption within one year, and the exclusion claim within three years or before a transfer to a third party (63.2(a)(1)(B), (f)(1)). The BOE’s August 3, 2026 letter confirms “two claim forms must be filed” for a family home.
• A value cap. If market value at the transfer reaches the parent’s factored base year value plus $1 million, the excess is added to the base (63.2(d)). The $1 million is adjusted every other February 16 by the FHFA house price index for California.
• Continuous occupancy. When no eligible child lives there any more, the home gets a new taxable value: per the BOE, “the fair market value of the home on the date you inherited it, adjusted each year after for the inflation factor”.
• Grandchildren qualify only if all of the grandchild’s parents who are the grandparents’ children are deceased on the date of transfer (63.2(a)(1)).

The BOE’s Letter To Assessors No. 2025/009 (March 7, 2025) explains the current figure: FHFA reported a 2.15 percent change in California’s house price index for 2024, “Accordingly, the $1 million amount is adjusted to $1,044,586.”

What it means on one house (our arithmetic, assumed figures). A parent bought decades ago; the factored base year value is $250,000. The parent dies in 2026 and the house is worth $1,500,000; it passes by TOD deed to one child.

The BOE’s own example uses the round $1 million: a $300,000 base and a $1,500,000 value give an adjusted base of $500,000. The adjusted figure matters for deaths after February 15, 2023; with $1,044,586 the same home would come out at $455,414 (our arithmetic). Late filers are not shut out entirely: a claim filed after the deadlines can be granted prospectively, from the lien date of the year it is filed (63.2(f)(3)).

Debts, creditors and Medi-Cal

A TOD deed does not put the house beyond creditors. During life, section 5650(a) says the property “is subject to process of the transferor’s creditors, as if no revocable transfer on death deed were executed or recorded.” After death:

• Liens of record (a mortgage, a tax lien) stay on the property and rank ahead of the beneficiary’s own creditors (sections 5652(b), 5670). The deed transfers “without covenant or warranty of title” (5652(e)).
• Unsecured debts, which include funeral expenses, last-illness costs and wage claims (5618), can be enforced against the beneficiary personally, but “shall not exceed the fair market value at the time of the transferor’s death of the property received”, less liens (5674(b)). The usual claim deadlines of Code of Civil Procedure section 366.2 apply (5672).
• If probate is opened, the beneficiary owes the estate a share of the unsecured debts calculated as if the house were a specific gift by will (5677), or may give the property back to the estate (5678).

Medi-Cal. Section 5654(a) says signing and recording a TOD deed is “not a lifetime transfer of the property” for Medi-Cal eligibility, and the form answers “No” to whether the deed affects eligibility. Section 5654(b) leaves the house subject to Department of Health Care Services claims “to the extent authorized by law.” The law that authorizes them is Welfare and Institutions Code section 14009.5, rewritten by SB 833 (Stats. 2016, ch. 30) for people who die on or after January 1, 2017. It defines the recoverable “estate” as property “in the individual’s probate estate” that federal law requires to be subject to recovery, bars recovery when there is a surviving spouse or registered domestic partner, a child under 21, or a blind or disabled child, and requires a hardship waiver for a “homestead of modest value” (50 percent or less of the county’s average home price). Our reading: a house that passes by a valid TOD deed is outside the probate estate, so it falls outside that definition for a death after 2016; if it goes back into a probate estate under section 5678, it would not be. The common summary that California stopped recovering from non-probate assets in 2017 matches the statute’s definition, with that caveat. The beneficiary must still send DHCS the 90-day notice of death under section 215. We could not load the DHCS estate recovery page on October 12, 2026 (the site blocked automated access), so this section rests on the statute alone.

Federal tax: no gift, no estate tax saving, a full step-up

Because the owner can revoke the deed until death, no gift is made when it is signed: under 26 CFR 25.2511-2(c), “A gift is incomplete in every instance in which a donor reserves the power to revest the beneficial title to the property in himself.” The flip side is that the house stays in the owner’s estate, which is why the statutory form answers “No” to the question “DOES THE TOD DEED HELP ME TO AVOID GIFT AND ESTATE TAXES?”, and section 5680(d) makes the beneficiary liable for a prorated share of any estate tax.

For income tax that is the good news: property acquired from a decedent takes a basis equal to “the fair market value of the property at the date of the decedent's death” (26 U.S.C. 1014(a)(1)), and property included in the gross estate by reason of death is covered by section 1014(b)(9). In California, a married couple’s community property also steps up on the survivor’s half under section 1014(b)(6). The mechanics, the exceptions and an eight-way worked example are in our step-up in basis guide; how a later sale is taxed is in our capital gains guide.

TOD deed vs living trust vs will in California

The probate fee row is why the TOD deed exists. Section 10810 pays the estate’s attorney 4 percent of the first $100,000, 3 percent of the next $100,000 and 2 percent of the next $800,000, on the value “without reference to encumbrances”: a $1,000,000 house with a $600,000 mortgage still produces a $23,000 statutory attorney fee, not a fee computed on $400,000 (our arithmetic and reading of 10810(b)). The personal representative has a separate compensation schedule we did not read for this page.

Small-estate thresholds, deaths on or after April 1, 2025 (Judicial Council list under Probate Code section 890):

• $208,850: total gross value of California property, excluding certain assets listed in section 13050 and any property in a 13151 petition, for collecting property by affidavit after 40 days (section 13100).
• $750,000: gross value of the decedent’s primary residence for a court petition under section 13151 after 40 days. AB 2016 (Stats. 2024, ch. 331) raised this from $184,500 and limited it to a primary residence; the petitioner must notify heirs and devisees within five business days.
• $69,625: gross value of real property for the section 13200 affidavit, filed no sooner than six months after death.

The Judicial Council says these amounts “will next be adjusted on April 1, 2028” unless a statute provides otherwise. For a family whose only significant asset is a modest primary residence, the $750,000 petition is now a court route without full probate; above it, or for a second property, it does not help (our reading of 13151).

What an owner, or a beneficiary, can do with this

This is analysis of public documents, not investment, legal or tax advice. The decisions here are legal drafting and property-tax filings, so the people who can act on them are an estate-planning attorney and the county assessor and recorder, not a financial adviser; we have not put an adviser-matching box on this page for that reason.

If you own a California home and are weighing a TOD deed:

• Check how title is held. Joint tenancy or community property with right of survivorship voids the deed if you die first (5664).
• Check the property type. Five or more units, commercial property, land over 40 acres in agricultural use or an LLC interest cannot pass this way (5610).
• Count the steps you must get right: two witnesses together, not a beneficiary if avoidable (5625(c)), a notary, and recording within 60 days (5624, 5626). A deed recorded on day 61 is not effective.
• Ask whether equal shares fit. No contingent beneficiaries, no conditions, no unequal splits on the form (5652, 5642(b)).
• Price the property tax outcome separately. The deed does not change it. Which child will live in the house, and how far its value is above your base plus $1,044,586, decide the reassessment (63.2).
• Watch the 2031 report. The deed is guaranteed only for deeds executed before January 1, 2032 (5600(c)).

If you are the beneficiary: record the affidavit of death, file the change in ownership statement within 150 days, serve the heirs and record the 5682(c) affidavit to start the 120-day clock, send the DHCS notice within 90 days if the owner had Medi-Cal, and, if you will live there, file the homeowners’ exemption within a year and the 63.2 exclusion claim within three years.

FAQ

Sources, read and saved on October 12, 2026: California Probate Code sections 215, 890, 5600-5698, 10810, 13100, 13150, 13151 and 13200, Revenue and Taxation Code sections 63.2, 480 and 11930, and Welfare and Institutions Code section 14009.5, from the Legislature’s official code site (leginfo.legislature.ca.gov); the chaptered texts and Legislative Counsel’s digests of AB 139 (Stats. 2015, ch. 293), SB 315 (Stats. 2021, ch. 215), AB 288 (Stats. 2023, ch. 62) and AB 2016 (Stats. 2024, ch. 331); the State Board of Equalization’s Proposition 19 page and Letters To Assessors No. 2025/009 (March 7, 2025) and 2026/026 (August 3, 2026); the Judicial Council of California list of amounts adjusted under Probate Code section 890; 26 U.S.C. 1014 (U.S. Code 2023 edition, GovInfo); and 26 CFR 25.2511-2 (eCFR). The property tax examples and the probate fee are our arithmetic with stated assumptions. This is analysis of public documents, not investment, legal or tax advice.