California Approves Use of Transfer Upon Death Deed

treat arial, pill sans-serif;”>By Jennifer Felten

capsule arial,sans-serif;”>In California, where property values are high, the cost to probate an estate for the transfer of a home is costly. As such, savvy homeowners take action to avoid such costs via trusts or via property ownership which includes a right of survivorship. Thanks to the Assembly Bill 139, which becomes effective on January 1, 2016, there is now a new way to avoid probate and transfer property upon death.

AB 139 provides for the automatic transfer of ownership of residential real property upon the death of the owner through the use of a document entitled “Simple Revocable Transfer on Death (TOD) Deed” (“TOD”). The law defines “residential property” as 1-4 residential units, a condominium or agricultural land improved with a residence and consisting of 40 acres or less. A TOD is not effective unless the transferor signs and dates the deed before a notary public. It must also be recorded within 60 days of the date of execution.

The grantor has the option to revoke a TOD at any time. There are three ways to effectuate that revocation: (1) recording of a “Revocation of Revocable Transfer on Death (TOD) Deed;” recording a new and different TOD; or (3) transferring the property to a third party via a deed recorded prior to the death of the grantor.

Upon the death of the grantor, an Affidavit of Death or other evidence of death must be recorded to transfer ownership to the named beneficiary. It should be noted that the right of survivorship rules trump such a deed, such that a TOD would be unenforceable against an owner claiming title through joint tenancy of community property with right of survivorship.

California is not the first state to enact such a law. Indeed, 26 other states already allow such transfers. Notwithstanding, many are concerned that this law will encourage elder abuse and fraud. Due to these concerns, this law it set to sunset on January 1, 2021. Thus, unless a bill is passed to extend the law, a TOD executed or recorded after that date will be invalid.

Female hand reaching for a house isolated on a white background.

——————————————————————————————–jen.free

Jennifer Felten

 Jennifer Felten, Esq.,  (805) 265-1031,   Ms. Felten specializes in representing both individuals and legal entities, providing representation and guidance on a variety of real estate related matters.

 

Jennifer Felten, Esq., Principal & Editor
(805) 265-1031
jennifer@relawapc.com     www.relawapc.com

Leave a Reply

Your email address will not be published. Required fields are marked *