Revocable Transfer on Death Deed: creditor's claims

Republished 3/7/2017.

The owner ("transferor") of certain real property in California may use a Revocable Transfer on Death Deed ("TODD") to transfer title after the transferor passes away to a beneficiary named on the TODD. The beneficiary may receive title to a property that is subject to creditors' claims.

Debts of the transferor secured by the property at the time of passing have priority over debts of the beneficiary secured by the same property.

A probate court could even order the property be used to pay unsecured creditors of the transferor.

The possibility of the transferor's creditors bringing claims against the beneficiary or later owners may reduce the value of the gift, and affect the beneficiary's ability to sell or mortgage the property.

See

CA Probate Code 5670 et seq.


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