AB 3004: Revocable transfer on death deeds.

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Existing

(1)Existing law governs the execution, revocation, and effectiveness of a revocable transfer on death (TOD) deed, defined as an instrument that makes a donative transfer of property to a named beneficiary, as defined, that operates on the transferors death, and remains revocable until the transferors death. Existing law establishes a statutory form of revocable transfer on death deed and requires that the statutory form be notarized and signed under penalty of perjury statutory forms for executing and revoking a revocable TOD deed that include provisions and instructions for the forms to be notarized by the transferor and recorded with the county recorder, as specified. recorder. Existing law requires that subsequent pages of that the form to execute a revocable TOD deed include frequently asked question information statutory common questions regarding the use of the that form. Existing law requires that, in order to be effective, a revocable TOD deed be recorded on or before 60 days after the date it was executed. Existing law makes these provisions inoperative on January 1, 2021.

This bill would delete the termination date of January 1, 2021, thereby authorizing the execution of revocable transfer on death deeds indefinitely. The bill would further authorize a transferor to make a donative transfer under those these provisions to a charitable organization or nonprofit entity as a beneficiary. The bill would additionally require a revocable TOD deed to be recorded during the transferors life to be effective. The bill would remove from the statutory forms for executing and revoking a revocable TOD deed the references to an exemption for a documentary transfer tax and a preliminary change of ownership report and modify the provisions for notarization. The bill would further clarify provide that the statutory common frequently asked question pages questions do not need to be recorded with the statutory form of to create a revocable transfer on death deed, and clarify that the failure to record those pages does not operate to nullify or affect the execution of a revocable transfer on death deed. TOD deed and apply this provision to revocable TOD deeds executed under specified circumstances.

Existing

(2)Existing law establishes proceedings for an action to enforce a liability that arises in connection to a request by a personal representative for the restoration of property to an estate. Existing law provides that an action under those provisions is barred 3 years after notice is provided under those provisions by affidavit or declaration, as specified.

This bill would clarify specify that this provision does not operate as a 3-year waiting period with respect to property that is transferred pursuant to a validly executed revocable transfer on death TOD deed.

The

(3)The bill would provide that all changes made to the Probate Code by this act would be applied retroactively.

(4)Existing law requires the California Law Revision Commission to study the effect of the revocable TOD deed and report its findings and recommendations for whether to continue the existence of the deed to the Legislature on or before January 1, 2020.

This bill would require the commission to additionally study whether the revocable TOD deed is effective for making transfers to charitable organizations or nonprofit entities as beneficiaries.

Existing law governs the execution, revocation, and effectiveness of a revocable transfer on death deed, defined as an instrument that makes a donative transfer of property to a named beneficiary, as defined, that operates on the transferors death, and remains revocable until the transferors death. Existing law establishes a statutory form of revocable transfer on death deed and requires that the statutory form be notarized and signed under penalty of perjury by the transferor and recorded with the county recorder, as specified. Existing law requires that subsequent pages of that form include frequently asked question information regarding the use of the form. Existing law makes these provisions inoperative on January 1, 2021.

Existing law establishes proceedings for an action to enforce a liability that arises in connection to a request by a personal representative for the restoration of property to an estate. Existing law provides that an action under those provisions is barred 3 years after notice is provided under those provisions by affidavit or declaration, as specified.

This bill would clarify that this provision does not operate as a 3-year waiting period with respect to property that is transferred pursuant to a validly executed revocable transfer on death deed.

The bill would provide that changes made to the Probate Code by this act would be applied retroactively.

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The people of the State of California do enact as follows:SECTION 1.Section 5600 of the Probate Code is amended to read:5600.(a)This part applies to a revocable transfer on death deed 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.(b)Nothing in this part invalidates an otherwise valid transfer under Section 5602.SEC. 2.SECTION 1.Section 5608 of the Probate Code is amended to read:5608.

Beneficiary means a person named in a revocable transfer on death deed as transferee of the property. Beneficiary may include a charitable organization or nonprofit entity.

SEC. 2.Section 5626 of the Probate Code is amended to read:5626.

(a)A revocable transfer on death deed is not effective unless the deed is recorded during the transferors life and on or before 60 days after the date it was executed.

(b)The transferor is not required to deliver a revocable transfer on death deed to the beneficiary during the transferors life.

(c)The beneficiary is not required to accept a revocable transfer on death deed from the transferor during the transferors life.

(d)(1) Subdivision (a) does not require the recordation of the Common Questions language that is specified in subdivision (b) of Section 5642. The failure to record that part of the statutory form has no effect on the effectiveness of a revocable transfer on death deed.

(2)(A) This subdivision applies to a revocable transfer on death deed executed on or after the effective date of the act that added this subdivision.

(B)This subdivision applies to a revocable transfer on death deed executed before the effective date of the act that added this subdivision only if the transferor was alive on the effective date of the act that added this subdivision.

SEC. 3.Section 5642 of the Probate Code is amended to read:5642.

A revocable transfer on death deed shall be substantially in the following form.

(a)The first page of the form shall be substantially the following:

SIMPLE REVOCABLE TRANSFER ON DEATH (TOD) DEED (California Probate Code Section 5642)

Recording Requested By:
When Recorded Mail This Deed To
Name:
Address:
Assessors Parcel Number:Space Above For Recorders Use

This document is exempt from documentary transfer tax under Rev. & Tax. Code 11930. This document is exempt from preliminary change of ownership report under Rev. & Tax. Code 480.3.

IMPORTANT NOTICE: THIS DEED MUST BE RECORDED ON OR BEFORE 60 DAYS AFTER THE DATE IT IS SIGNED AND NOTARIZED
Use this deed to transfer the residential property described below directly to your named beneficiaries when you die. YOU SHOULD CAREFULLY READ ALL OF THE INFORMATION ON THE OTHER PAGES OF THIS FORM. You may wish to consult an attorney before using this deed. It may have results that you do not want. Provide only the information asked for in the form. DO NOT INSERT ANY OTHER INFORMATION OR INSTRUCTIONS. This form MUST be RECORDED on or before 60 days after the date it is signed and notarized or it will not be effective.

PROPERTY DESCRIPTION
Print the legal description of the residential property affected by this deed:


BENEFICIARY(IES)
Print the FULL NAME(S) of the person(s) who will receive the property on your death (DO NOT use general terms like my children) and state the RELATIONSHIP that each named person has to you (spouse, son, daughter, friend, etc.):




TRANSFER ON DEATH
I transfer all of my interest in the described property to the named beneficiary(ies) on my death. I may revoke this deed. When recorded, this deed revokes any TOD deed that I made before signing this deed.
Sign and print your name below (your name should exactly match the name shown on your title documents):

		Date

NOTE: This deed only transfers MY ownership share of the property. The deed does NOT transfer the share of any co-owner of the property. Any co-owner who wants to name a TOD beneficiary must execute and RECORD a SEPARATE deed.

ACKNOWLEDGMENT OF NOTARY

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California		)
County of		)



On ___________________________ before me, (here insert name and title of the officer), personally appeared ___________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature ___________________________ (Seal)

(b)Subsequent pages of the form shall include frequently asked question information:

COMMON FREQUENTLY ASKED QUESTIONS ABOUT THE USE OF THE TOD DEED FORM

WHAT DOES THE TOD DEED DO? When you die, the identified property will transfer to your named beneficiary without probate. The TOD deed has no effect until you die. You can revoke it at any time.

CAN I USE THIS DEED TO TRANSFER BUSINESS PROPERTY? This deed can only be used to transfer (1) a parcel of property that contains one to four residential dwelling units, (2) a condominium unit, or (3) a parcel of agricultural land of 40 acres or less, which contains a single-family residence.

HOW DO I USE THE TOD DEED? Complete this form. Have it notarized. RECORD the form in the county where the property is located. The form MUST be recorded on or before 60 days after the date you sign it or the deed has no effect.

IS THE LEGAL DESCRIPTION OF THE PROPERTY NECESSARY? Yes.

HOW DO I FIND THE LEGAL DESCRIPTION OF THE PROPERTY? This information may be on the deed you received when you became an owner of the property. This information may also be available in the office of the county recorder for the county where the property is located. If you are not absolutely sure, consult an attorney.

HOW DO I RECORD THE FORM? Take the completed and notarized form to the county recorder for the county in which the property is located. Follow the instructions given by the county recorder to make the form part of the official property records.

WHAT IF I SHARE OWNERSHIP OF THE PROPERTY? This form only transfers YOUR share of the property. If a co-owner also wants to name a TOD beneficiary, that co-owner must complete and RECORD a separate form.

CAN I REVOKE THE TOD DEED IF I CHANGE MY MIND? Yes. You may revoke the TOD deed at any time. No one, including your beneficiary, can prevent you from revoking the deed.

HOW DO I REVOKE THE TOD DEED? There are three ways to revoke a recorded TOD deed: (1) Complete, have notarized, and RECORD a revocation form. (2) Create, have notarized, and RECORD a new TOD deed. (3) Sell or give away the property, or transfer it to a trust, before your death and RECORD the deed. A TOD deed can only affect property that you own when you die. A TOD deed cannot be revoked by will.

CAN I REVOKE A TOD DEED BY CREATING A NEW DOCUMENT THAT DISPOSES OF THE PROPERTY (FOR EXAMPLE, BY CREATING A NEW TOD DEED OR BY ASSIGNING THE PROPERTY TO A TRUST)? Yes, but only if the new document is RECORDED. To avoid any doubt, you may wish to RECORD a TOD deed revocation form before creating the new instrument. A TOD deed cannot be revoked by will, or by purporting to leave the subject property to anyone via will.

IF I SELL OR GIVE AWAY THE PROPERTY DESCRIBED IN A TOD DEED, WHAT HAPPENS WHEN I DIE? If the deed or other document used to transfer your property is RECORDED before your death, the TOD deed will have no effect. If the transfer document is not RECORDED before your death, the TOD deed will take effect.

I AM BEING PRESSURED TO COMPLETE THIS FORM. WHAT SHOULD I DO? Do NOT complete this form unless you freely choose to do so. If you are being pressured to dispose of your property in a way that you do not want, you may want to alert a family member, friend, the district attorney, or a senior service agency.

DO I NEED TO TELL MY BENEFICIARY ABOUT THE TOD DEED? No. But secrecy can cause later complications and might make it easier for others to commit fraud.

WHAT DOES MY BENEFICIARY NEED TO DO WHEN I DIE? Your beneficiary must RECORD evidence of your death (Prob. Code 210), and file a change in ownership notice (Rev. & Tax. Code 480). If you received Medi-Cal benefits, your beneficiary must notify the State Department of Health Care Services of your death and provide a copy of your death certificate (Prob. Code 215).

WHAT IF I NAME MORE THAN ONE BENEFICIARY? Your beneficiaries will become co-owners in equal shares as tenants in common. If you want a different result, you should not use this form.

HOW DO I NAME BENEFICIARIES? You MUST name your beneficiaries individually, using each beneficiarys FULL name. You MAY NOT use general terms to describe beneficiaries, such as my children. For each beneficiary that you name, you should briefly state that persons relationship to you (for example, my spouse, my son, my daughter, my friend, etc.).

WHAT IF A BENEFICIARY DIES BEFORE I DO? If all beneficiaries die before you, the TOD deed has no effect. If a beneficiary dies before you, but other beneficiaries survive you, the share of the deceased beneficiary will be divided equally between the surviving beneficiaries. If that is not the result you want, you should not use the TOD deed.

WHAT IS THE EFFECT OF A TOD DEED ON PROPERTY THAT I OWN AS JOINT TENANCY OR COMMUNITY PROPERTY WITH RIGHT OF SURVIVORSHIP? If you are the first joint tenant or spouse to die, the deed is VOID and has no effect. The property transfers to your joint tenant or surviving spouse and not according to this deed. If you are the last joint tenant or spouse to die, the deed takes effect and controls the ownership of your property when you die. If you do not want these results, do not use this form. The deed does NOT transfer the share of a co-owner of the property. Any co-owner who wants to name a TOD beneficiary must complete and RECORD a SEPARATE deed.

CAN I ADD OTHER CONDITIONS ON THE FORM? No. If you do, your beneficiary may need to go to court to clear title.

IS PROPERTY TRANSFERRED BY THE TOD DEED SUBJECT TO MY DEBTS? Yes.

DOES THE TOD DEED HELP ME TO AVOID GIFT AND ESTATE TAXES? No.

HOW DOES THE TOD DEED AFFECT PROPERTY TAXES? The TOD deed has no effect on your property taxes until your death. At that time, property tax law applies as it would to any other change of ownership.

DOES THE TOD DEED AFFECT MY ELIGIBILITY FOR MEDI-CAL? No.

AFTER MY DEATH, WILL MY HOME BE LIABLE FOR REIMBURSEMENT OF THE STATE FOR MEDI-CAL EXPENDITURES? Your home may be liable for reimbursement. If you have questions, you should consult an attorney.

(c)The frequently asked question pages in subdivision (b) do not need to be recorded with the form established in subdivision (a). The failure to record the pages in subdivision (b) shall not operate to nullify or affect the execution of a revocable transfer on death deed.

SEC. 4.Section 5644 of the Probate Code is amended to read:5644.

A transferor may revoke a revocable transfer on death deed by an instrument in substantially the following form:

Revocation of Revocable Transfer on Death (TOD) Deed
(California Probate Code Section 5600)

Recording Requested By:

When Recorded Mail This Deed To
Name:
Address:
Assessors Parcel Number:Space Above For Recorders Use

This deed revocation is exempt from documentary transfer tax under Rev. & Tax. Code 11930. This deed revocation is exempt from preliminary change of ownership report under Rev. & Tax. Code 480.3.

IMPORTANT NOTICE: THIS FORM MUST BE RECORDED TO BE EFFECTIVE

This revocation form MUST be RECORDED before your death or it will not be effective. This revocation form only affects a transfer on death deed that YOU made. A transfer on death deed made by a co-owner of your property is not affected by this revocation form. A co-owner who wants to revoke a transfer on death deed that he/she made must complete and RECORD a SEPARATE revocation form.

PROPERTY DESCRIPTION

Print the legal description of the property affected by this revocation:



REVOCATION

I revoke any TOD deed to transfer the described property that I executed before executing this form.

SIGNATURE AND DATE

Sign and print your name below (your name should exactly match the name shown on your title documents):

	Date

ACKNOWLEDGMENT OF NOTARY

A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California	)
County of	)



On ___________________________ before me, (here insert name and title of the officer), personally appeared ___________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature ___________________________ (Seal) CERTIFICATE OF NOTARY ACKNOWLEDGMENT REQUIRED

SEC. 4.SEC. 5.Section 13111 of the Probate Code is amended to read:13111.

(a)Subject to the provisions of this section, if proceedings for the administration of the decedents estate are commenced in this state, or if the decedents personal representative has consented to the payment, transfer, or delivery of the decedents property under this chapter and the personal representative later requests that the property be restored to the estate, each person to whom payment, delivery, or transfer of the decedents property is made under this chapter is liable for:

(1)The restitution of the property to the estate if the person still has the property, together with (A) the net income the person received from the property and (B) if the person encumbered the property after it was delivered or transferred to the person, the amount necessary to satisfy the balance of the encumbrance as of the date the property is restored to the estate.

(2)The restitution to the estate of the fair market value of the property if the person no longer has the property, together with (A) the net income the person received from the property and (B) interest on the fair market value of the property from the date of disposition at the rate payable on a money judgment. For the purposes of this subdivision, the fair market value of the property is the fair market value, determined as of the time of the disposition of the property, of the property paid, delivered, or transferred to the person under this chapter, less any liens and encumbrances on the property at that time.

(b)Subject to subdivision (c) and subject to any additional liability the person has under Sections 13109 to 13112, inclusive, if the person fraudulently secured the payment, delivery, or transfer of the decedents property under this chapter, the person is liable under this section for restitution to the decedents estate of three times the fair market value of the property. For the purposes of this subdivision, the fair market value of the property is the fair market value, determined as of the time the person liable under this subdivision presents the affidavit or declaration under this chapter, of the property paid, delivered, or transferred to the person under this chapter, less the amount of any liens and encumbrances on the property at that time.

(c)The property and amount required to be restored to the estate under this section shall be reduced by any property or amount paid by the person to satisfy a liability under Section 13109 or 13110.

(d)An action to enforce the liability under this section may be brought only by the personal representative of the estate of the decedent. Whether or not the personal representative brings an action under this section, the personal representative may enforce the liability only to the extent necessary to protect the interests of the heirs, devisees, and creditors of the decedent.

(e)An action to enforce the liability under this section is forever barred three years after presentation of the affidavit or declaration under this chapter to the holder of the decedents property, or three years after the discovery of the fraud, whichever is later. The three-year period specified in this subdivision is not tolled for any reason. This subdivision shall not be construed to operate as a three-year waiting period for the transfer of property pursuant to a properly executed revocable transfer on death deed.

(f)In the case of a nondomiciliary decedent, restitution under this section shall be made to the estate in an ancillary administration proceeding.

SEC. 6.Section 21 of Chapter 293 of the Statutes of 2015, as amended by Section 1 of Chapter 179 of the Statutes of 2016, is amended to read:SEC. 21.

(a)The California Law Revision Commission shall study the effect of Californias revocable transfer on death deed set forth in Part 4 (commencing with Section 5600) of Division 5 of the Probate Code and make recommendations in this regard. The commission shall report all of its findings to the Legislature on or before January 1, 2020.

(b)In the study required by subdivision (a), the commission shall address all of the following:

(1)Whether the revocable transfer on death deed is working effectively.

(2)Whether the revocable transfer on death deed should be continued.

(3)Whether the revocable transfer on death deed is subject to misuse or misunderstanding.

(4)What changes should be made to the revocable transfer on death deed or the law associated with the deed to improve its effectiveness and to avoid misuse or misunderstanding.

(5)Whether the revocable transfer on death deed has been used to perpetuate financial abuse on property owners and, if so, how the law associated with the deed should be changed to minimize this abuse.

(6)Whether it is feasible and appropriate to expand the revocable transfer on death deed to include the following:

(A)The transfer of stock cooperatives or other common interest developments.

(B)Transfers to a trust or other legal entity.

(7)Whether the revocable transfer on death deed is effective for making transfers to charitable organizations or nonprofit entities as beneficiaries.

(c)(1)The report required by subdivision (a) shall comply with Section 9795 of the Government Code.

(2)Pursuant to Section 10231.5 of the Government Code, this This section is repealed on January 1, 2024.

SEC. 5.SEC. 7.

The changes made to the Probate Code by this act shall be applied retroactively.

CORRECTIONS: TextPage 5.

The people of the State of California do enact as follows:SECTION 1.Section 5600 of the Probate Code is amended to read:5600.

(a)This part applies to a revocable transfer on death deed 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.

(b)Nothing in this part invalidates an otherwise valid transfer under Section 5602.

(c)This part shall remain in effect only until January 1, 2021, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2021, deletes or extends that date. The repeal of this part pursuant to this subdivision shall not affect the validity or effect of a revocable transfer on death deed that is executed before January 1, 2021, and shall not affect the authority of the transferor to revoke a transfer on death deed by recording a signed and notarized instrument that is substantially in the form specified in Section 5644.SEC. 2.Section 5608 of the Probate Code is amended to read:5608.