In September of last year, California Governor Jerry Brown signed into law House Bill 139 — creating a new type of deed designed to help expedite the probate process. Specifically, the “revocable transfer on death deed” was created to simplify the probate process for surviving family members, effectively allowing valuable real estate to pass to heirs outside of the probate court. The following answers some of the most frequently-asked questions about this new estate planning tool.
FAQ #1: What led to the creation of the revocable transfer on death deed?
To understand the the revocable transfer on death deed, it helps to better understand the traditional methods of transferring real estate prior to its introduction. When a person dies owning real estate, there were generally three ways in which the home could transfer to the intended beneficiaries: (i) via joint tenancy with the right of survivorship; (ii) through the directives in a Will or Trust, or (iii) by intestate succession as laid out in the California Probate Code. For testators wishing to avoid the time, cost and hassle of probate, placing the deed in a revocable or irrevocable trust was the only way to accomplish this goal, which proved somewhat costly for Californians and required the execution of an elaborate trust agreement.
FAQ #2: What are the benefits of this new deed?
Keeping in mind the obstacles explained above, House Bill 139 created a new type of deed that allows testators the opportunity to transfer property in the same way as via a revocable trust without having to actually set up and execute a trust at all. Using this deed, the property owner can name beneficiaries right in the document, allowing those heirs to take ownership immediately upon death. Of course, a new deed naming the new owners would be drafted at some point after the death of the owners, but the inconvenient probate process can be avoided (at least with regard to the real property).
FAQ #3: Are there are any specific requirements?
There are a few. First, the real property must be a single family home, condominium unit, or multiple residence of not more than four residential dwelling units. The property may also be a single family residence on no greater than 40 acres of farmland.
The deed must be signed and dated before a notary public in order to be enforceable. It must also be recorded no later than 60 days from the date it is signed. Lastly, the deed may be revoked by the property owner at any time.
Contact an experienced estate planning attorney today!
If you are in the midst of weighing your options and would like to discuss the various estate planning tools available in California, please contact Brian Chew, Attorney at Law, by calling 949-347-5256.