California’s Transfer on Death Deed Cannot Go to a Nonprofit

 In Charitable Giving, Revocable Trusts, Wills

Question:

I used the newly enacted (in California) T.O.D. method of transferring title to a property upon my expiration. I named a non-profit as the beneficiary and filed it with the county recorder. It was rejected and sent back to me. Their reason is that the beneficiary has to be a person. I would like to contest this and could use a professional opinion on how to challenge this “persons only” policy. I want to leave what I own to the non-profit.

Response:

This was new to me so I did a little research. You are correct that as of January 1, 2016, California property owners can create a “revocable transfer on death” deed that passes property to the named beneficiary or beneficiaries automatically at death without the owner giving up any ownership rights during life. There is even a statutory form for these deeds. The option is limited to residential property and can include buildings with up to four residential units and farms of up to 40 acres. This law is reflective of California’s continuing efforts to simplify legal transactions so that many can be carried out without involving attorneys.

However, the county recorder is correct. The statute defines a beneficiary as “a person.” You would have to get the legislature to amend the law to include a nonprofit. In the meantime, you can use more traditional estate planning methods such as a will or trust.

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