|The official summary of the legislation:SUMMARY: Seeks to establish, until January 1, 2021, a new, non-probate method for conveying real property upon death through a revocable transfer upon death deed [RTDD].
Specifically, this bill:
▪ Allows an interest in certain residential real property to be transferred on death by recording an RTDD signed and acknowledged by the record owner of the property, with the capacity to contract, and designating a beneficiary or beneficiaries. The deed transfers ownership of that property interest upon the death of the owner. Is effective for any RTDD made by a 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, but any RTDD properly executed before that date remains valid and may be revoked after that date.
▪ Requires that to be valid an RTDD must be recorded within 60 days of execution.
▪ Provides that an RTDD does not affect any ownership rights during the transferor’s lifetime, nor does it convey any rights to the beneficiary or the beneficiary’s creditors during the transferor’s lifetime. An RTDD is not effective until the transferor’s death.
▪ Provides a statutory form RTDD and requires that an RTDD must be in a substantially similar form. The statutory deed provides information to the transferor, including explaining how the RTDD works, how it is effectuated and some of its consequences.
▪ Provides a statutory form for revocation of an RTDD.
▪ Provides that an RTDD may have multiple beneficiaries, who take in equal shares as tenants in common, but does not provide for alternate beneficiaries. The RTDD does not provide for class gifts, e.g., gifts to the transferor’s unnamed grandchildren. Provides that if a beneficiary dies prior to the transfer, the remaining beneficiaries take in equal shares. If all beneficiaries die prior to the transfer, the RTDD has no effect.
▪ Provides that an RTDD is revocable at any time by a transferor with capacity to contract. If an RTDD and another revocable instrument have both been recorded and both purport to dispose of the same property, the instrument that has been executed later prevails. If two deeds – one revocable and one irrevocable – are both recorded, the irrevocable deed prevails, even if recorded earlier.
▪ Provides that an RTDD must transfer all the transferor’s interest in the property.
▪ Provides that property subject to an RTDD is still part of the transferor’s estate for purposes of Medi-Cal eligibility and will be subject to Medi-Cal reimbursement claims. Property subject to an RTDD is subject to claims from the transferor’s secured and unsecured creditors. Allows the beneficiary to avoid unsecured claims by returning the property to the transferor’s estate.
▪ Requires the beneficiary to effectuate transfer of the property by recording an affidavit of the transferor’s death.
▪ Provides that, if property is held in joint tenancy or as community property with right of survivorship when the transferor dies, the transfer is void and the property passes pursuant to the right of survivorship. Provides, in the information accompanying the statutory deed, that if a transferor wants to sever the joint tenancy and not have the property pass through right of survivorship rules, the transferor cannot use the RTDD.
▪ Permits contest of the RTDD for, among other things, lack of capacity to transfer, transfer to disqualified person, fraud, duress, and undue influence.
▪ Requires the California Law Revisions Commission [CLRC] to study the effects of the RTDD and make recommendations to the Legislature by January 1, 2020.