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Effective January 1, 2016

Transfer on Death

What you absolutely have to know:

Assembly Bill 139 becomes effective on January 1, 2016. AB 139 provides for the automatic transfer of ownership of residential real property upon the death of the owner without the need for probate. The new law requires the recording of a statutory form document entitled "Simple Revocable Transfer on Death (TOD) Deed" ("TOD")."

Residential property is defined as 1-4 residential units, a condominium or agricultural land improved with a residence and consisting of 40 acres or less.

The TOD is effective for any transferor who dies on or after January 1, 2016, whether or not the TOD was executed or recorded before, on or after January 1, 2016. The law is scheduled to remain in effect until January 1, 2021. No TOD may be executed or recorded after that date.

An Affidavit of Death or other evidence of death is recorded when the owner dies, transferring the ownership to the named beneficiary. A Change in Ownership Notice must accompany the evidence of death. An affidavit will be deemed to be void if the owner of the property holds title in joint tenancy or as community property with right of survivorship at the time of death. The TOD may be revoked by recording the statutory form "Revocation of Revocable Transfer on Death (TOD) Deed."

Any recorded TOD or Revocation will be reflected in the Preliminary Report.

Example Exception:

A Simple Revocable Transfer on Death (TOD) Deed pursuant to California Probate Code Section 5642 dated ________ recorded______ as instrument number __________ of Official Records.

Transferor: __________

Beneficiary: _________

California and Federal Estate Taxes are unaffected by this new law. Please continue to follow existing guidelines governing California and Federal Estate Taxes.

Additional Information:

A valid TOD must meet the following requirements:

    1. The TOD must be signed and dated by the record owner and acknowledged before a notary public.
    2. The TOD must be recorded on or within 60 days of execution. The deed will deemed to be ineffective if it is not recorded in that time frame
    3. The TOD form must substantially comply with the statutory form set out in Probate Code Section 5642, which includes a list of common questions about the use of the form.

NOTE: The TOD will be deemed to be void if the owner of the property holds title in joint tenancy or as community property with right of survivorship at the time of death.

Evidence of death of the owner (transferor) must be recorded in order to vest title in the beneficiary(ies) shown on the TOD.

Evidence of death may be in the form of an affidavit or declaration and should be reviewed by an underwriter prior to vesting title in the beneficiary(ies).

The evidence of death must include all of the following:

    1. Name of the decedent
    2. Date and place of the decedent's death
    3. A description of the real property being transferred
    4. Either of the following, as appropriate:
    a. The affiant or declarant is the surviving spouse of the decedent.
    b. The affiant or declarant is not the surviving spouse of the decedent, but the rights of the affiant or declarant to thedescribed property are not affected by Probate Code Section 5040 or 5042.

Note: Any recorded affidavit of death will require a certified copy of the death certificate.

There are three ways to revoke a TOD.

    1. Sign, notarize and record a statutory form revocation
    2. Sign, notarize and record a new TOD.
    a. The later revocation of the new TOD does not revive a TOD that had been previously revoked by recordation of the new TOD.
    b. If there are multiple recorded TODs for the same property, the later executed deed is the operative instrument.
    3. Sell or transfer the property prior to death and record the transfer deed. NOTE: A TOD cannot be revoked by a will.