Avoiding Probate AB 139 Transfer-on-Death Deeds: From The Trenches of AgentQ
Quintella Griffin
Certified Probate, Bankruptcy, & Divorce RE Specialist; Foreclosures, Certified REO-Short Sales; Inherited homes, Partition, Conservatorship sales and Contract Paralegal
Introduction
This article is about AB 139 signed in September 2015 which became effective January 1, 2016. I am not and attorney. This is not legal advice, but words of wisdom from my personal experiences in the trenches as a Realtor. I’m writing about this topic because my grandmother died in 2010. This article is also in "Memory of Reverend Victor Lee Medearis." Prior to my grandmother’s death, we had the family on 4th of July picnic to discuss her property. She didn’t want anyone to deal with her affairs so we all sat down and discussed it. We took a vote on probate will versus a living trust. The entire family opted for a living trust because no one could afford probate. “We The People” paralegal services prepared her living trust for a small fee.?
As a real estate agent, I’m so excited about this new law and how it will change and impact the lives of loves ones who are left to pay for expensive funerals. It’s enough that families grieve over after death. It causes even more stress when you have to go through probate. This is law is a good thing that was sponsored by Michael Gatto Democratic, Chad J. Mayes Republican and Marie Waldron Republican. Kudos to the politicians.
New California Law Transfer On Death Deeds
This text is taken directly from AB 139, Gatto. Nonprobate transfers: revocable transfer upon death deeds passed effective January 1, 2016.
(1)?Existing law provides that a person may pass real property to a beneficiary at death by various methods including by will, intestate succession, trust, and titling the property in joint tenancy, among others.
This bill would, until January 1, 2021, create the revocable transfer on death deed (revocable TOD deed), as defined, which would transfer real property on the death of its owner without a probate proceeding, according to specified rules. The bill would require that a person have the capacity to contract in order to make or revoke the deed and would require that the deed be in a statutory form provided for this purpose. The bill would require that a revocable TOD deed be signed, dated, acknowledged, and recorded, as specified, to be effective. The bill would provide, among other things, that the deed, during the owner’s life, does not affect his or her ownership rights and, specifically, is part of the owner’s estate for the purpose of Medi-Cal eligibility and reimbursement. The bill would void a revocable TOD deed if, at the time of the owner’s death, the property is titled in joint tenancy or as community property with right of survivorship. The bill would establish priorities for creditor claims against the owner and the beneficiary of the deed in connection with the property transferred and limits on the liability of the beneficiary. The bill would establish a process for contesting the transfer of real property by a revocable TOD deed. The bill would make other conforming and technical changes. The bill would require the California Law Revision Commission to study and make recommendations regarding the revocable TOD deed to the Legislature by January 1, 2020.
(2)?Existing law provides that a person who feloniously and intentionally kills a decedent is not entitled to specified property, interests, or benefits, including any gifts of personal property made in view of impending death.
This bill would specify that a person who feloniously and intentionally kills a decedent is not entitled generally to property and interests that are transferred outside of probate, including real property transferred by a revocable TOD deed.
(3)?Existing law establishes simplified procedures for dealing with a decedent’s estate valued under $150,000, including authorizing the successor of the decedent to collect and distribute property due the decedent without letters of administration or awaiting probate of a will. Existing law provides that a beneficiary who receives real or personal property under these circumstances, as specified, may be liable to the estate if probate proceedings are subsequently commenced. Existing law provides, in this context, that a spouse has liability for the debts of a deceased spouse if the decedent’s property is in the control of the surviving spouse. Existing law permits a court judgment to enforce liability in these instances only to the extent necessary to protect the heirs, devisees, and creditors of the decedent.
This bill would delete the reference to court judgment and provide instead that the personal representative of the estate is permitted to enforce liability only to the extent necessary to protect the heirs, devisees, and creditors of the decedent.
See the entire bill at?https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB139
Transfer-on-Death Deeds for Real Estate
A transfer-on-death (TOD) deed, also called a beneficiary deed, looks like a regular deed used to transfer real estate. But there's a crucial difference: It doesn't take effect until your death. You must record?the deed with the local?county recorder’s?office before your death, but you are free to change your mind and revoke the deed at any time during your life.
STEP BY STEP PROCESS
Get a TOD Deed Form?
Get a transfer-on-death (TOD) form or you can prepare your own form. Make sure the form meets California requirements. You should consult with an attorney if you draw up your own TOD.
Name the Beneficiary
You can name anyone you please to inherit your real estate—a person, more than one person, or an organization.?Your choice is called the "grantee-beneficiary" in most states. You can also name an alternate beneficiary, commonly called a "successor grantee-beneficiary."
Describe the Property
Describe the property in the TOD. Copy the exact description of the property from your current deed.
Sign the Deed
If you own the property alone, you're probably the only person who needs to sign the deed. California is a community property state, both you and your spouse should sign the deed, just to make it clear that your spouse doesn't object.?If you own the property with someone else, you should both sign the deed. The TOD deed will not take effect until the last surviving owner dies. If you are married but you believe the property is your sole and separate property, consult with an attorney to make sure your last wishes will be honored. You don't want the TOD revoked by the surviving spouse.?
Record the Deed
The deed will not be effective unless you record it with the county recorder's office before your death. You can take it to the county recorder's office in the county where the property is located.?
IF YOUR WANT TO REVOKE THE TOD AND RECORD NEW ONE
Record a Revocation
The clearest way to make your intention clear is to sign a simple document revoking the TOD?deed and record it just like you recorded the original deed. Then the public records show that the deed was revoked. All co-owners should sign the revocation. If you own the property with someone else and you all have the right of survivorship, the revocation isn't effective unless it's signed by the last surviving owner.?You don't have to necessarily use this form. You can simply. You can simply record a NEW TOD-Deed that which will supersede the last one you recorded.
Record a New TOD Deed
You can also simply sign and record a new TOD?deed, leaving the property to someone else. Most states' laws specifically say that if there is more than one TOD?deed, only the most recent one is valid. It's still clearer, however, to record a revocation and then a new deed.?
Transfer the Property to Someone Else
You are free to give away or sell the property that you've left in a TOD deed. If you no longer own the property at your death, the TOD?deed will have no effect.
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Possible Financial Abuse of Seniors
Seniors often suffer at the hand of their own children, family members, friends and people that they so often trust, financial abuse. This law will allow them to record a TOD prior to death. However, there may be one major drawback of revocable transfer on death deed, its potential usefulness to bad actors who would commit elder abuse.
If a financial predator can exercise undue influence on an ailing senior citizen before their death, they could exploit the new law to appropriate a victim's home or other property. Should suspected elder abuse?occur, an heir must file a lawsuit?within 120 days of the testator's passing in order to prevent sale of the property and bring the matter to court. If you suspect elder abuse or financial abuse, file a police report and contact your local DA's office.?https://ag.ca.gov/bmfea/pdfs/citizens_guide.pdf?;?https://www.cdss.ca.gov/agedblinddisabled/PG1298.htm;?https://slh.lsnc.net/
Expiration of this Law
The law will expire on January 1st, 2021. This depends on its results and could be extended as a beneficial measure to state homeowners who want a less complex method for transferring their property without going into probate.
Changes In The Law In 2022
I wanted to provide an update since there have been change which became effective January 1, 2022. The California State Legislature enacted changes to the state’s laws governing transfer-on-death deeds—also called TOD deeds. A California TOD deed is a legal document that conveys real estate to a designated beneficiary when the current owner dies.?See?Cal. Prob. Code §5614(a). TOD deeds have become a popular tool in California estate planning which allows property owners to transfer real estate outside of probate. Here is the link to the updates. https://www.dhirubhai.net/pulse/tod-deeds-changes-law-2022-from-trenches-agentq-quintella-griffin/
Sample Documents
These are sample forms of the TOD Deed:
TOD - DEED FORM
DON'T FORGET TO ADD THE DESCRIPTION OF THE PROPERTY
OR ATTACH EXHIBIT A WITH THE DESCRIPTION
(USE THIS FORM TO RECORD AND NAME BENEFICIARY OR BENEFICIARIES)
UPDATE FEBRUARY 27, 2020 UPDATE. HERE IS A LINK WITH INSTRUCTIONS https://saclaw.org/wp-content/uploads/sbs-tod-deed.pdf
COMMON QUESTIONS ANSWER SHEET
(USE THIS FORM TO REVOKE TOD-DEED. THEN YOU CAN NAME A NEW BENEFICIARY OR BENEFICIARIES OR SIMPLY RECORD A NEW TOD DEED THAT WILL SUPERSEDE THE LAST DEED RECORDED)
(USE THIS FORM AFTER DEATH TO TRANSFER - YOU WILL NEED THE DECEDENT'S DEATH CERTIFICATE TO ATTACH TO THIS AFFIDAVIT TO PROVE DEATH)
This link below will take you to ALL County?Registrars and Recorders In The State of California. Click on (A thru Z) to find your county that you should record.
THE END
Owner at Hend
8 年If the home is owned jointly by a husband and wie, should we each sign a "Simple" TOD deed, or is there a "Joint" TOD deed that we both should sign for California?