Revocable Transfer On Death Deed

The purpose of the new law is to provide a transfer of
real property on the death of its owner without a probate
proceeding.
The new law adds a Part 4, Revocable Transfer on Death Deed, to
Division 5 of the Probate Code (commencing with section 5600).
The new law applies to a revocable transfer on death deeds made by
a transferor who dies on or after January 1, 2016, whether the deed
was executed or recorded before, on, or after January 1, 2016.
The new law sunsets on January 1, 2021, but a revocable transfer
on death deed (“RTDD”) that is recorded thereafter will still be
valid if it was executed before January 1, 2021. (Probate Code §
5600).
The CLRC found that the advantage of a revocable transfer upon
death deed (“RTDD”) is a simple, low-cost method of conveying
real property.
An RTDD would in particular benefit senior citizens, whose estate
consists primarily or exclusively of a family home, who want to
leave their home to a loved one upon death but do not want to give
a present interest in the property.
The disadvantage is that it can be abused and can help facilitate fraud
on the transferor or his intended beneficiaries. The CLRC found
that the advantage outweighed the disadvantage and, in October
2006, the CLRC issued its recommendation that California adopt a
a revocable transfer on death deed.
AB 139
Goes into effect
JANUARY 1, 2016
REVOCABLE TRANSFER ON DEATH DEED
Three prior bills passed out of the assembly but failed to pass in the
Senate – AB 250 (DeVore, 2007), AB 724 (DeVore, 2009-2010)
and AB 699 (Wagner, 2011). AB 139 is nearly identical to those bills,
except it does not allow for a life estate as part of an RTDD.
In 2005, the California Legislature enacted AB 12, which directed the
California Law Revision Commission (“CLRC”) to study nonprobate
transfer instruments that become effective only upon the death of
the transferor.
AFFECTS ONLY RESIDENTIAL PROPERTIES
The new law only affects the following:
(1) Real property improved with not less than one nor more than
four residential dwelling units;
(2) A condominium unit, including the limited common elements
allocated to the exclusive use thereof that form an integral part of
the condominium unit;
(3) A single tract of agricultural real estate consisting of 40 acres or
less that is improved with a single-family residence.
(Probate Code § 5610).
Disclaimer: This information is for general informational purposes only and does not constitute investment, financial, tax, or legal advice. Please contact
an investment, financial, tax, or legal advisor regarding your specific situation.
Contact our office at 619 874-7978 for more detail on this law addendum!
Source: www.leginfo.legislature.ca.gov

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