For many Californians, their home is not just a place to live. It’s their most valuable asset, the cornerstone of their financial stability, and often the legacy they hope to leave behind for loved ones. Because real estate plays such a central role in an estate, one of the most common questions homeowners ask is whether they should put their house in a trust or use a Transfer-on-Death (TOD) deed.
Both options are designed to help a home pass to heirs without going through probate. However, they function very differently and offer very different levels of protection, flexibility, and control. Choosing the wrong option can create problems that only become visible after death, when it is too late to fix them.
At Patton Law Group, we regularly help clients evaluate whether a trust or a Transfer-on-Death deed is the better choice for their situation. The right answer depends on more than just avoiding probate. It depends on family structure, financial goals, long-term planning needs, and risk tolerance.
Why Homeowners Want to Avoid Probate in California
Probate is the court-supervised process used to transfer property after someone dies. In California, probate can be especially burdensome when real estate is involved.
Probate typically takes many months, and often longer than a year. It is also expensive. Statutory attorney and executor fees are based on the value of the estate, not the amount of work required. For a home with significant equity, those fees can be substantial.
Probate is also public. Court filings, asset values, and beneficiary information become part of the public record. For many families, this lack of privacy is a serious concern.
Because of these issues, many homeowners look for ways to pass their house outside of probate. Trusts and Transfer-on-Death deeds are two of the most commonly discussed tools.
What Is a Living Trust?
A living trust, often called a revocable living trust, is a legal entity created during your lifetime to hold ownership of assets, including real estate. When you create a trust, you typically act as your own trustee, meaning you retain full control over the property while you are alive.
Placing your house into a trust does not mean giving it away. You can live in it, sell it, refinance it, or remove it from the trust if circumstances change. The trust becomes effective at death, allowing the property to pass directly to your chosen beneficiaries without probate.
Trusts are widely used in California because they offer flexibility, continuity, and protection that go beyond simply avoiding probate.
What Is a Transfer-on-Death Deed?
A Transfer-on-Death deed, sometimes called a TOD deed, allows you to name a beneficiary who will inherit your home automatically when you die. You remain the owner during your lifetime, and the deed does not take effect until death.
California allows TOD deeds for residential real estate, and they can be revoked or changed during your lifetime. On the surface, a TOD deed may appear simpler and less expensive than creating a trust.
However, simplicity can come at a cost. TOD deeds have limitations and risks that are often overlooked.
How a Trust Transfers Your Home After Death
When a home is properly titled in a trust, it does not become part of the probate estate. Instead, the successor trustee you name steps in after your death and transfers the property according to the instructions in the trust document.
This process is typically much faster than probate. There is no court supervision, no statutory probate fees, and far greater privacy. The trust also allows you to control how and when beneficiaries receive the property.
For example, a trust can allow a beneficiary to live in the home for a period of time, require the property to be sold and proceeds divided, or hold the property for minor children until they reach a certain age.
How a Transfer-on-Death Deed Transfers Your Home
With a TOD deed, the property transfers directly to the named beneficiary when you die. The beneficiary must record an affidavit and comply with statutory requirements to complete the transfer.
While probate is avoided, the process is not always seamless. Beneficiaries may still need legal guidance to properly clear title, address creditor claims, or resolve disputes.
Importantly, the TOD deed only controls the transfer of the home. It does nothing to coordinate with the rest of your estate.
Control and Flexibility Compared
One of the most significant differences between a trust and a TOD deed is control.
A trust allows you to provide detailed instructions. You can name multiple beneficiaries, specify percentages, impose conditions, and address what happens if a beneficiary predeceases you. You can also update the trust as life circumstances change.
A TOD deed is far more limited. It transfers the property outright to the named beneficiary. There is no ability to stagger distributions, protect the property from a beneficiary’s creditors, or provide safeguards for minors or vulnerable individuals.
If flexibility and long-term planning matter to you, a trust typically offers far more options.
What Happens If a Beneficiary Has Problems?
Real life is rarely simple. Beneficiaries may have financial difficulties, creditor issues, substance abuse problems, or strained family relationships.
A trust can be drafted to address these concerns. It can delay distributions, require oversight, or protect assets from certain risks. A TOD deed cannot.
Once the home transfers under a TOD deed, the beneficiary owns it outright. That ownership may expose the property to lawsuits, creditors, divorce proceedings, or poor financial decisions.
Blended Families and Second Marriages
Blended families often face challenges that TOD deeds are poorly equipped to handle.
For example, a homeowner may want their spouse to live in the home for life, but ultimately want the property to pass to children from a prior relationship. A TOD deed cannot easily accomplish this.
A trust can. It can grant a surviving spouse the right to live in the home while preserving the remaining interest for children. This level of planning is often essential in second marriages or blended families.
What About Minor Children?
Minor children cannot legally own real estate outright. If a TOD deed names a minor as beneficiary, complications arise. Court involvement may be required to appoint a guardian or conservator to manage the property.
A trust avoids this problem. It allows you to designate a trustee to manage the property on behalf of minor children until they reach an age you choose. This can prevent unnecessary court supervision and ensure responsible management.
Incapacity Planning During Your Lifetime
One major advantage of a trust is that it addresses incapacity, not just death.
If you become incapacitated due to illness or injury, a successor trustee can manage the trust property without court involvement. This continuity can be critical for paying bills, maintaining the home, or selling property if needed.
A TOD deed offers no incapacity protection. It only functions at death. If incapacity occurs, additional planning or court intervention may still be required.
Creditor Issues and Claims After Death
Under California law, creditors may still have the ability to make claims against property transferred by a TOD deed. Beneficiaries may be personally responsible for certain debts tied to the property.
Trust administration allows for a more structured approach to handling debts and claims. The trustee can resolve obligations before distributing property, reducing the risk of future disputes.
Tax Considerations
Both trusts and TOD deeds generally allow beneficiaries to receive a stepped-up tax basis at death, which can reduce capital gains taxes if the property is sold.
However, tax outcomes can vary depending on the overall estate, how the property is titled, and whether additional planning tools are involved. A trust provides more opportunities to coordinate tax planning across multiple assets.
Ease of Use vs. Long-Term Protection
A Transfer-on-Death deed is often marketed as a simple solution. In some cases, simplicity is appropriate. For example, a single homeowner with one adult beneficiary and minimal assets may find a TOD deed sufficient.
However, simplicity should not be confused with suitability. Many homeowners choose TOD deeds without fully understanding the risks or limitations. Problems often arise after death, when beneficiaries must deal with issues that could have been avoided with a trust.
Common Mistakes With TOD Deeds
Many issues arise when TOD deeds are not carefully executed or reviewed.
- Naming beneficiaries who cannot legally or practically receive the property
- Leaving older TOD deeds in place that conflict with newer intentions
- Creating inconsistencies between the TOD deed and an existing trust or will
- Improper execution or recording that renders the deed ineffective
Because TOD deeds are relatively new in California, misunderstandings about their use are common. Legal guidance is essential before relying on one.
When a Trust Is Usually the Better Choice
A trust is often the better option when a homeowner wants comprehensive planning, privacy, and long-term control. This is especially true for homeowners with significant equity, multiple beneficiaries, blended families, minor children, or concerns about incapacity.
While a trust requires more upfront planning, it often saves time, money, and stress later.
Making the Right Choice for Your Situation
There is no one-size-fits-all answer to whether you should put your house in a trust or use a Transfer-on-Death deed. The right choice depends on your goals, family dynamics, and risk tolerance.
What matters most is making an informed decision. Relying on generalized advice or online forms can lead to unintended consequences that only become clear when it is too late to fix them.
How Patton Law Group Can Help
At Patton Law Group, we help California homeowners evaluate their options and create estate plans that reflect their values and priorities. Whether a trust, a TOD deed, or a combination of tools makes sense, our goal is to provide clarity and confidence.
Estate planning is about more than transferring property. It is about protecting people.
Your home represents years of effort, sacrifice, and care. Deciding how it will pass to the next generation deserves thoughtful planning.
Understanding the differences between a trust and a Transfer-on-Death deed allows you to choose the approach that best protects your family and your legacy.
If you are considering how to transfer your home without probate, the attorneys at Patton Law Group can help you evaluate your options and create a plan that works for you. Schedule a consultation and take the next step toward peace of mind.
