|California Creates New Way to Transfer Real Property on Death|
California's Governor approved Assembly Bill 139 (AB139) which creates a new way of passing on property on death: the revocable transfer on death deed (revocable TOD deed).
As of January 1, 2016 a person will be able to transfer an interest on real property on their death by recording a revocable TOD deed. The transferor can transfer one to four residential units but, while the deed does not need to be delivered to the beneficiary, it needs to be signed and dated in the presence of a notary public to be valid and the transferor can revoke the deed at any time.
Revocable TOD deeds can be revoked by: recording a revocation form; recording a new and different TOD deed; or transferring the property to someone else (recording that deed prior to the transferor's death).
Revocable TOD deeds must be recorded within 60 days of being signed before a notary – a transferor may give out more than one revocable TOD deed but the one which has the most recent recording date will be valid.
The author of the bill is quoted saying that that revocable TOD deeds may prove to be "the only tool available to unmarried homeowners who wish to leave their property to a lifelong partner […] upon death, but who cannot afford to set up a trust" as the establishment of a revocable trust can be very costly. Wills must also go through the lengthy probate process.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Oct.15, 2015