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California law offers individuals ways to transfer real property to a chosen beneficiary at death. These include a will, trust, joint tenancy, and community property. While some of these ways to effect a transfer of property must happen during the property owner’s lifetime, others happen upon death, and each vary in the cost and ease of transfer, revocability options, ownership rights, effect on Medi-Cal eligibility, and availability to creditors. Although other estate planning options are available to property owners, the revocable transfer on death deed is the most simple and inexpensive option. Furthermore, it may be the only tool available to unmarried homeowners who wish to leave their property to a lifelong partner, family member, friend or loved one upon death, but who do not want to transfer present interest (such as joint tenancy) or cannot afford to set up a trust.
Legislation creating a non-probate method for conveying interest in real property upon death, Assembly Bill 139, is effective January 1, 2016. This bill accomplishes the transfer by means of a revocable transfer upon death deed (RTDD). The RTDD automatically transfers ownership of the property - defined to include 1-4 residential units, a condominium, or agricultural land of 40 acres or less. - upon the death of the owner, and must contain a legal description. A RTDD may only be revoked by a recorded document.
Assembly Bill 139 makes the RTDD effective for any transferor who dies on or after January 1, 2016, regardless of when the RTDD was executed or recorded. No RTDD may be executed on or after January 1, 2021, which is when the law is scheduled to
be repealed (unless extended by the legislature prior to that date); however, any RTDD properly executed before that date remains valid and may also be revoked after that date. To be valid, the deed must be recorded within 60 days of execution. The deed is only effective at death and does not affect any ownership rights during the transferors lifetime.
For questions on this new bill, see your estate planner or attorney
The information provided here was provided by Paul Horn Attorney at Law