February 27, 2015

Revocable Transfer upon Death Deed

Back on June 21, 2011, I penned a post about proposed bill AB-699 which would have authorized a homeowner to designate a beneficiary for their property upon their death. The bill ultimately failed in the Senate Judiciary committee and thus the revocable transfer on death deed  never came into fruition.

Now a similar bill has been introduced as AB-139 which is modeled after AB-699. 

According to the Legislative Counsel's Digest:

"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. The bill would require that a person have testamentary capacity to make or revoke the deed and would require that the deed be in a statutory form provided for this purpose. The revocable TOD deed must 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 also make 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."

Currently, the common methods in which a person can transfer real property on their death include (1) a trust, (2) a will, (3) intestate succession and (4) joint tenancy. This proposed bill would provide a 5th method in which to transfer property on death.

To be clear, this is a proposed bill. It is not yet California law. Any attempt to transfer property this way is a nullity as of this writing.

The bill can be tracked here:

For the time being, a trust is generally the recommended method of transfer for California real property upon one's death. The reason being is that a trust avoids probate, a costly and lengthy court proceeding.