A Transfer on Death (TOD) Deed is often promoted as a simple and inexpensive way to transfer real estate to your loved ones without probate. However, many homeowners don’t realize that a TOD Deed may not provide the full protection they need—especially when it comes to property tax reassessment.

The Reassessment Risk with a TOD Deed

Under California’s Proposition 13, a property is typically reassessed to its current market value when there is a change in ownership, which can result in significantly higher property taxes. While some transfers between parents and children can qualify for an exclusion, a TOD Deed does not automatically protect your property from reassessment. The rules surrounding property tax exclusions are complex, and if the transfer does not meet all the legal requirements, your beneficiaries could end up paying thousands more in property taxes.

How a Living Trust Protects Your Property

A properly structured Living Trust provides a much stronger layer of protection for your real estate. Here’s how:

• Avoids Probate – Like a TOD Deed, a Living Trust allows your property to pass to your beneficiaries without the costly and time-consuming probate process.
• Protects Against Reassessment – When structured correctly, a Living Trust can help ensure that your heirs qualify for property tax exclusions that could prevent reassessment.
• Provides Flexibility and Control – Unlike a TOD Deed, a Living Trust allows for detailed instructions on how and when your beneficiaries receive the property, helping to safeguard their financial future.

Take Action to Protect Your Home

If you want to ensure that your property remains in your family without unexpected tax hikes, a Living Trust is the best option. Let us help you create a comprehensive estate plan that gives you peace of mind and financial security.

For a limited time, The Document People is offering 15% off our Legacy Living Trust package! Don’t wait until it’s too late—schedule an appointment today.