New Laws and Regulations for 2022 – Part 4 (Changes to Transfer on Death Deeds as of January 1, 2022)

February 15, 2022 | Category: BPE Newsletter, Estate Law, Estate Planning

New Laws and Regulations for 2022 – Part 4 (Changes to Transfer on Death Deeds as of January 1, 2022)

By: Terri L. Popkes, Esq.

February 15, 2022

California law allows individuals to bypass estate planning and leave real property to a beneficiary via a revocable Transfer on Death Deed, which is codified in Probate Code section 5600. What is a Transfer on Death Deed, you ask?

A Transfer on Death Deed is an instrument that makes a donative transfer of a real property to a named beneficiary on the death of the transferor which remains revocable until the transferor’s death. The transferring instrument is required to be notarized and recorded with the county recorder within 60 days of execution.

Basically, an individual with no estate planning documents can sign a Transfer on Death Deed, which includes language that makes the transfer revocable during the transferor’s lifetime and is valid so long as the document is notarized and recorded within 60 days of execution. The beneficiary can then successfully bypass probating that real property upon the death of the transferor. A simple notification of the death of the transferor to the county recorder signed by the beneficiary was all that was needed to transfer the property into the beneficiary’s name.

Prior to January 1, 2022, the Transfer on Death Deed forms required statutory “common questions” relating to the use of the form, but these “common questions” and the 60-day recording requirement were originally intended to become inoperative as of January 1, 2022. Recently, however, Legislature amended these statutes and revised the requirements, making them remain operative until January 1, 2032. The new revisions include redefining and newly defining certain terms such as “beneficiary,” “subscribing witness,” “unsecured debts” and “real property,” among others.

Also, the amendment changes how the transfer or revocation becomes effective. Going forward, the Transfer on Death Deed will need to be signed by the transferor before a notary public, dated and signed by two witnesses. Prior to the transfer becoming effective at the death of the transferor, the beneficiary must serve notice on the transferor’s heirs and the amendment creates a new statutory form for that purpose.

Although a Transfer on Death Deed seems simple, there are a number of complexities that someone who is thinking of using a Transfer on Death Deed needs to consider. These complexities, if not navigated correctly, can cause a Transfer on Death Deed to not work as intended.

To avoid any potential problems arising from solely relying on a Transfer on Death Deed and to avoid the time and expense of probate, it is strongly advised to have an estate plan in place leaving any real property to a designated beneficiary or beneficiaries. Please contact BPE Law Group to discuss with our Estate Planning professionals the many benefits of having an Estate Plan in place.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are facing a legal issue of any kind, get competent legal advice in your State immediately so that you can determine your best options.

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