BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2007-2008 Regular Session
AB 250 A
Assembly Member DeVore B
As Amended June 16, 2008
Hearing Date: June 24, 2008 2
Family Code; Probate Code 5
GMO:jd 0
SUBJECT
Nonprobate Transfers: Revocable Transfer On Death (TOD)
Deed
DESCRIPTION
The bill would create two new nonprobate property transfer
instruments, the "Simple Revocable Transfer on Death (TOD)
Deed" and the "Revocable Transfer On Death (TOD) Deed With
Life Estate," which would be effective upon death of the
transferor.
The bill would:
establish rules for the making and revocation of these
deeds, and provide mandatory statutory form deeds and one
form revocation for use by transferors of either deed;
outline the beneficiary's liability for debts of the
transferor and the procedure for restitution to the
estate by the beneficiary of the revocable TOD deed or
the revocable TOD deed with life estate, if appropriate;
establish the procedure for contesting a revocable TOD
deed or a revocable TOD deed with life estate and for a
creditor to collect payment for transferor's debts;
require the California Law Revision Commission to report
back to the Legislature on or before January 1, 2013, on
specified data concerning the use, misuse, or
misunderstanding of the revocable TOD deed and
recommendations for change; and
make other conforming changes.
The bill contains a sunset date of January 1, 2014.
(more)
AB 250 (DeVore)
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BACKGROUND
AB 250 was heard by this committee on July 10, 2007. At
the hearing, the author requested that no vote be taken on
the bill. Amendments were made in April and June of 2008
to address some issues raised in last year's analysis of
the bill. A summary of amendments made to the bill since
it was last heard in this committee may be found in Comment
2.
AB 12 (DeVore), Chapter 422, Statutes of 2005, was
introduced as a bill to create the instrument that AB 250
now calls "revocable transfer on death deed," but was
subsequently amended to instead direct the California Law
Revision Commission (CLRC) to study this type of deed and
determine whether California should create it as a new
nonprobate transfer instrument that becomes effective only
upon the death of the transferor. The study was
recommended for the following reasons: (1) there is a 1914
California case that already allows for the use of
beneficiary deeds (another name for the TOD deed) that has
never been overturned ( Tennant v. John Tennant Memorial
Home (1914) 167 Cal. 570); (2) various parties, including
the California Land Title Company, the California Judges
Association, and the Trusts and Estates Section of the
State Bar, expressed strong opposition to the bill for lack
of clarity and failure to address unintended consequences;
and (3) the possibility of countless litigation because of
the potential impact of a beneficiary deed on the
transferor's property ownership and of fraudulent
transfers.
The CLRC was directed to address the following
non-exclusive list of issues in its study:
Whether and when a beneficiary deed would be the most
appropriate nonprobate transfer mechanism to use, if a
beneficiary deed should be recorded or held by the
grantor or grantee until the time of death, and, if not
recorded, whether a potential for fraud is created.
What effect the recordation of a beneficiary deed would
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have on the transferor's property rights after
recordation.
How a transferor may exert his or her property rights in
the event of a dispute with the beneficiary.
Whether it would be more difficult for a person who has
transferred a potential interest in the property by
beneficiary deed to change his or her mind than if the
property were devised by will to the transferee or
transferred through a trust or other instrument.
The tax implications of a beneficiary deed on the
transferor, the transferee, and the general public as a
result of the nonprobate transfer, including whether the
property would be reassessed and if tax burdens would
shift or decrease.
The CLRC issued its recommendation in October 2006, noting
that while the deed has advantages and disadvantages,
"creation of a TOD deed would be beneficial in California."
CHANGES TO EXISTING LAW
Existing law provides various methods by which a person may
transfer his or her real property interests to another
person upon death, such as through a will, a trust, a joint
tenancy with right of survivorship, community property with
right of survivorship, an intervivos transfer with reserved
life estate, and a nonprobate transfer.
Existing law permits the nonprobate transfer of property on
death, including an insurance policy, contract of
employment, bond, mortgage, promissory note, certified or
uncertified security, account agreement, custodial
agreement, deposit agreement, compensation plan, pension
plan, individual retirement plan, employee benefit plan,
trust, conveyance, deed of gift, marital property
agreement, or other written instrument of a similar nature.
(Probate Code Sec. 5000. All references are to the Probate
Code, unless otherwise indicated.)
Existing law provides for the nonprobate transfer of real
property insofar as persons may execute a revocable deed to
a beneficiary while reserving a life estate. ( Tennant v.
John Tennant Memorial Home (1914) Cal. 570.)
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Existing law provides that upon the death of one joint
tenant, real property held in joint tenancy with right of
survivorship vests immediately in the surviving joint
tenant or tenants. (Civil Code Sec. 683.)
Existing law provides that, if a transferee under a will,
trust, deed, or other instrument fails to survive the
transferor or is treated as if the transferee predeceased
the transferor, or fails to survive a future time, the
transfer does not lapse but instead passes to the issue of
the deceased transferee, except as otherwise provided.
(Sec. 21110.)
This bill would establish two versions of a new nonprobate
transfer instrument, the revocable transfer on death (TOD)
deed, for use as specified to transfer real property upon a
transferor's death. Specifically, this bill would:
(1)define the instrument, the revocable TOD deed, which
would transfer real property to a named beneficiary upon
the death of the transferor outside of probate, and
establish the rules for the making and the revocation of
the instrument;
(2)define the instrument, the revocable TOD deed with life
estate, which would create a life estate in a named life
tenant, with a remainder interest in the named
beneficiaries; ( This bill would treat both instruments
the same in all other respects.)
(3)provide a mandatory statutory form of a revocable TOD
deed, each containing the required information,
instructions, and answers to a long list of "commonly
asked questions" about the instrument;
(4)establish rules regarding the effect of the execution
and recordation of a revocable TOD deed, and their
interaction with other types of instruments;
(5)establish rules for a revocable TOD deed beneficiary's
liability for the debts of a transferor, including rules
for when an action is filed based on the debts, rules for
the beneficiary's liability for restitution under
specified circumstances, who may bring an action to
enforce beneficiary's liability, and payment of costs for
a proceeding to enforce beneficiary's liability;
(6)establish rules regarding the effectuation of the
property transfer, and a beneficiary's standing vis ? vis
a distributee under a final order of distribution if the
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property was probated;
(7)establish rules for a contest involving the revocable
TOD deed;
(8)allow only a personal representative to enforce
liability of a beneficiary of a revocable TOD deed or any
other beneficiary of a decedent with a small estate, to
the extent necessary to protect heirs, devisees, and
creditors of the transferor-decedent, and, as to
creditors, provide for recovery of the reasonable cost of
a proceeding under this provision as an extraordinary
service by the personal representative or the attorney of
the decedent's estate; and
(9)make other conforming changes where appropriate.
This bill would direct the California Law Revision
Commission to study the effect of the revocable TOD deed as
established by this bill and to report to the Legislature
on or before January 1, 2013, with specific instructions to
study:
(1)whether the revocable TOD deed is working effectively;
(2)whether the revocable TOD deed should be continued;
(3)whether the revocable TOD deed is subject to misuse or
misunderstanding;
(4)what changes should be made to the revocable TOD deed or
the law associated with the deed to improve its
effectiveness and to avoid misuse or misunderstanding;
and
(5)whether the revocable TOD deed has been used to
perpetuate financial abuse on property owners and, if so,
how the law should be changed to minimize this abuse.
This bill contains a sunset provision, making it
inoperative on January 1, 2014, unless extended or made
permanent by another statute.
COMMENT
1. Stated need for the bill
The author states that the purpose of the bill is "to
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provide a simple and inexpensive way for a person to
transfer real property on death. ?Existing law provides
other ways to transfer real property to intended heirs
without probate, but cannot afford a trust (sic). Without
the availability of the TOD deed, some seniors will use
other means to make transfer (sic) the property, often
with undesirable results. ?The revocable TOD deed would
avoid all of these problems."
2. Amendments made to AB 250 since the last hearing on
July 10, 2007
Following are the amendments made to the bill since it
was heard in committee last year:
(a) There are now two instruments, rather than one:
(1) the revocable TOD deed and (2) the revocable TOD
deed with life estate. The two are treated
identically in all respects, except that a revocable
TOD deed with life estate names a life tenant and
remainder beneficiary(ies). Simulations of these two
deeds, together with the Commonly Asked Questions on
the back of each deed, is provided to the Committee
with this analysis.
(b) The revocable TOD deed with life estate and the
Commonly Asked Questions page for this deed form have
been amended to reflect additional information
regarding the life tenant's interest.
(c) Both revocable TOD deeds must be recorded within
60 days of signing of the deed. (Previously the bill
only required recordation of the revocable TOD deed
before transferor's death.)
(d) The time for commencing an action and recording a
lis pendens to invalidate a revocable TOD deed was
extended from 90 days to 120 days after the
transferor's death.
(e) The statutory revocation form has been changed to
remove the requirement of specifying recordation
details of the property that was the subject of the
TOD deed.
(f) The bill now contains a five-year sunset (January
1, 2014).
(g) The notary acknowledgement on the statutory form
has been updated.
AB 250 (DeVore)
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3. The CLRC Report
Proponents of AB 12 (DeVore, Ch. 422, Stats. 2005) as
originally drafted argued that a beneficiary deed (or
something similar) would be very helpful to small
estates, and to lower-income people who cannot afford to
engage the services of an attorney for estate planning or
other professionals who practice financial and estate
planning. Indeed, the CLRC report and recommendation on
which this bill is based states that the argument made
for a beneficiary deed (another name for a TOD deed) is
that "it is cheaper and quicker than probate, less
expensive than a lawyer-prepared trust, and preferable to
a joint tenancy." (CLRC Recommendation, Revocable
Transfer On Death (TOD) Deed, October 2006, page 200)
(hereinafter "CLRC Report"). The same report admits,
however, that "the revocable TOD deed may appear
deceptively simple, yet cause problems not anticipated by
a transferor who uses it." (CLRC Report, page 201.)
The CLRC reports that it received numerous communications
emphasizing that a homeowner should be able to deed
property directly to heirs without the expense of probate
or a trust proceeding. Indeed staff has received
numerous pleas, albeit mostly from the same people since
the last hearing, that state they serve senior citizens
and that "proposal for a simple, one page state
recognized beneficiary deed that we could use at the
Senior centers and elsewhere would be a real benefit to
California seniors."
The sample statutory form created by this bill for each
deed is attached to this analysis, as well as the
Commonly Asked Questions form for the back of the deed.
Although one could argue that each deed is simple enough
to fit on one page and the questions list short enough to
fit on the back of the deed, each deed is still a
daunting document to read, if the user is to understand
all of the nuances and after-effects of the legally
binding document once properly executed. It would still
be questionable whether a potential transferor would
actually read and understand the Commonly Asked Questions
on the back of the form. The result could be fodder for
litigation after transferor's death.
AB 250 (DeVore)
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When this committee heard AB 12, the committee
recommended that the CLRC report back to the Legislature
by January 1, 2009 instead of January 1, 2007 (see Senate
Judiciary Committee Analysis of AB 12, dated June 28,
2005, Comment 2). The rationale for the committee's
recommendation was that this area is very complex and
full of pitfalls for the unwary consumer, and the CLRC
should be given the time, given all of its other work, to
study the area thoroughly and, if indeed a recommendation
to create a beneficiary deed is the result, to draft both
the bill and the form deed carefully.
However, in this case the CLRC, known for its
deliberative, paced work on a vast array of subject
matters, completed its work on this subject in less than
10 months, with the recommendation that constituted AB
250 by October 2006. And in the full year since AB 250
was last heard in this committee, the CLRC has not
dispelled all of the concerns expressed by those who
oppose the use of the simplified TOD deed in California.
These concerns remain and are discussed throughout
Comments 5, 6, and 7.
When AB 250 was heard in the Assembly Judiciary Committee
last year, that committee's concerns with the potential
misunderstanding and misuse of revocable TOD deeds and
the potential cases of fraudulent deeds conveyed under
duress or undue influence compelled the committee's
amendments to require that CLRC return to the Legislature
with a report on specific issues in three years (2012).
IS IT WISE TO PLACE A BRAND NEW INSTRUMENT FOR TRANSFERS
OF PROPERTY IN THE HANDS OF UNSOPHISTICATED TRANSFERORS
BEFORE IT IS FULLY VETTED?
GIVEN THE RECURRING HORROR STORIES OF SENIORS BEING
CHEATED OUT OF THEIR HOMES BY A VARIETY OF FRAUDULENT
SCHEMES, WOULD THIS BILL GIVE SCAM ARTISTS A NEW TOOL
WITH WHICH TO DEFRAUD SENIORS?
4. Is the revocable TOD deed for small estates only?
There is no doubt the CLRC has done substantial
background work on this subject. However, concerns
remain that the target users of this revocable TOD deed,
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i.e., individuals with small estates and low-income
persons, could be misled as to the efficacy of using the
deed instead of other avenues that may be available to
them now.
The bill supposedly targets small estates yet has no
limitation on its use. The Probate Code defines small
estates as consisting of a combined real and personal
property valued at less than $100,000.
Thus, a person with $100,000 equity in his home can,
under this bill, execute a revocable TOD deed and so can
a person with a $1 million equity in her home. However,
it is likely that the beneficiary of the transferor with
the smaller estate can confirm the transfer of the
property by affidavit, as envisioned by this bill, but
the beneficiary of the transferor with the larger estate
will be in a probate administration proceeding anyway.
Further, the transferor with a small estate can simply
execute a deed (not a TOD deed, but a plain deed to the
property) that is not recorded but delivered to the
beneficiary. The beneficiary can record the deed after
death and confirm the transfer by affidavit. Under this
scenario, what is the advantage of a revocable TOD deed?
Another alternative is for the transferor with the small
estate to transfer the property to himself or herself and
the beneficiary in joint tenancy with right of
survivorship. The resulting interest to the beneficiary
would not be too different than if the property were
transferred via a revocable TOD deed.
5. Revocable TOD Deed: execution, form, warranty of title
AB 250 would create a new instrument that would allow the
nonprobate transfer of real property. The revocable
transfer on death (RTOD) deed must be signed and dated by
a transferor with capacity, and acknowledged before a
notary public. The deed must be recorded within 60 days
of the date it is executed; if it is not recorded within
this time period, it is void and ineffective. If
properly executed and recorded, the RTOD deed would
transfer the property to the beneficiary upon
transferor's death.
AB 250 (DeVore)
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a. Neither delivery nor acceptance is required
The bill would provide that the transferor is not
required to deliver a RTOD deed to the beneficiary,
and the beneficiary is not required to accept the deed
from the transferor, during the transferor's life.
(Proposed Sec. 5624 (b) and (c).)
Proponents state that the target population of the
RTOD deed is senior citizens who are looking for a
simple and inexpensive way to give away their one
asset, their home. Here is an example of how the
non-delivery and non-acceptance requirement could
create a problem. Grandpa executes a RTOD deed naming
his only grandson as beneficiary of his home, records
it within 60 days as required, then quietly puts it
away in a box; he doesn't tell anyone about it. Two
years later, Grandpa's memory is beginning to fail,
although he is not incompetent and still has legal
capacity. He forgets the prior recorded, valid RTOD
deed in the box in the closet, and he executes another
RTOD deed naming his granddaughter who had just spent
one week visiting him. He records this second RTOD
deed immediately but still does not deliver it to his
granddaughter or tells anyone about it. Grandpa
clearly intended the property to go to his grandson
and he clearly had capacity when he executed the first
RTOD deed. Grandpa also clearly intended to give the
property to his granddaughter through an RTOD deed but
simply forgot that he had already given the property
away. Grandpa dies, and now there is a contest, which
will have to be resolved by litigation, which is the
last thing Grandpa probably would have wanted.
Perhaps if the property had a value less than $100,000
the grandchildren would be able to resolve the lack of
clarity about Grandpa's intent regarding the property.
However, if this house is worth $1 million, the issue
of testator's intent would undoubtedly be litigated.
Although the rules provided in AB 250 for deciding
which RTOD deed would be the operative instrument (the
later recorded deed, since both are revocable,
proposed Secs. 5628(a); Sec. 5660(b).), the rules
provided for execution, recordation, and delivery (or
non-delivery) of the deed need clarity. To avoid
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litigation, bright lines should be drawn, especially
when the testator's capacity and intent could easily
be questioned because of his or her being at a
vulnerable age.
SHOULD THESE RULES BE REVISITED?
The California Judges Association (CJA) points out
this critical flaw in AB 250 in its letter dated June
11, 2008. The CJA states that because delivery of the
deed is not explicitly required, AB 250 leaves the
possibility that an executed deed, pocketed for
further reflection, may be recorded without the
knowledge, consent, or intent of the transferor. This
could still be true, even with the 60-day recordation
requirement in the bill.
Under existing law, a transferor may actually create a
valid transfer that is not contingent on the
transferor's death, which is then delivered but not
recorded until after death. Under AB 250, a revocable
TOD deed of the same property later executed and
recorded would trump the earlier, valid deed that had
been delivered but not recorded. AB 250 does not
require delivery of the deed to the RTOD deed
beneficiary. Once more, this is fodder for
litigation.
A deed takes effect only when delivered. (Civil Code
Sec. 1054.) Delivery depends on the intention that
title will pass irrevocably even though the right of
possession and enjoyment may be postponed to a future
time. It is a question of fact, and evidence of the
circumstances and of the acts and declarations of the
grantor ? Delivery may be actual (physical delivery)
or constructive. A deed may be deemed constructively
delivered to the grantee: (a) when by agreement of the
parties it is understood to be delivered and the
grantee is entitled to immediate delivery; (b) when it
is delivered by the grantor to a stranger for the
benefit of the grantee and the grantee's assent is
shown or may be presumed. (Witkin, 12 Summary of
California Law, 10th Ed. Sec. 291. Citations omitted.)
AB 250 requires neither delivery of the deed by the
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transferor nor acceptance of the deed by the
beneficiary. And as described in previous examples
given, an executed RTOD deed (especially one that has
been recorded) could be easily filed away in a filing
cabinet by a transferor and then unintentionally
revoked by the recordation of a new RTOD deed, because
the transferor simply forgot that he or she had
already executed one.
SHOULD NOT DELIVERY OF THE DEED BE REQUIRED?
b. Third party may sign the RTOD deed
Proposed Sec. 5624(b) provides that a RTOD deed may be
signed and dated in a transferor's name by a person
other than the transferor at the transferor's
direction and in the transferor's presence, but shall
be acknowledged by the transferor. AB 250 provides a
statutory form of the RTOD deed and the RTOD deed with
life estate. A sample of each deed is provided in
this analysis.
It is not difficult to imagine a scenario where a
person may be persuaded by a friend or caregiver to
have the friend fill out the form and attempt to sign
and date it at the transferor's "direction" in the
presence of the transferor and the notary. This is
similar to the attestation of a will by two witnesses
in the presence of the testator. The difference is
that in this case one of the witnesses would be
actually signing and dating the instrument and not
just witnessing the execution of the instrument by the
transferor.
There are also problems with use of the statutory
form. First, there is no place on the statutory form
for the real transferor to acknowledge the act.
Second, the acknowledgement of notary language would
not permit the friend to sign the RTOD deed, even at
the transferor's direction. Third, even if the notary
public were to acknowledge the friend's signature as
having been "authorized" by the transferor in the
presence of the notary, another beneficiary
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questioning the validity of the RTOD deed at
transferor's death (such as transferor's husband or
heir) would undoubtedly go to court and litigate the
transfer, especially if the property is a very
expensive piece of real estate.
IS NOT THIS PROVISION FRAUGHT WITH POSSIBILITIES FOR
ABUSE?
In fact, for years the courts have been handling
thousands of contest cases involving fraudulent
transfers, challenges to validity of testamentary
instruments, voidable and void instruments, and trust
or estate administration questions.
WOULD THE CREATION OF THE RTOD DEED BY THIS BILL CAUSE
MORE LITIGATION RATHER THAN SIMPLIFY THE TRANSFER OF
REAL PROPERTY?
c. Revocable TOD deed with life estate
Last year, the bill contained one statutory form for
the revocable TOD deed, providing an option in the
form for a transferor to transfer a life estate to a
life tenant and the remainder interest to another
beneficiary. Concerns were raised by opponents of the
bill regarding the likelihood that users of the
statutory form would not be sophisticated enough to
understand what those terms mean, and could therefore
make mistakes.
The bill before the committee today shows two
statutory forms, one the "Simple Revocable TOD Deed"
and the other the "Revocable TOD Deed With Life
Estate." The revocable TOD deed with life estate form
shows a line to be filled in for "Life Tenant" and
several lines for "Remainder Beneficiaries." On the
back of the form, the first question is "What does the
TOD Deed do?" and the answer states: "When you die,
the identified property will transfer to the "life
tenant" for the duration of that person's life. After
that person's death, the property will transfer to
your "remainder beneficiary(ies)." Probate is not
required for a transfer under this deed. The deed has
no effect until you die. You can revoke it at any
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time."
Even though the bill now treats the two deeds
separately, still there is little explanation to a
layperson of the terms a "life tenant" and "remainder
beneficiary" in the statutory forms such that a person
who wishes to go with "simple and inexpensive" and
thus uses the form will likely still have to consult
with a lawyer for advice.
The Trusts and Estates Section of the State Bar of
California is also concerned about misunderstandings
that potential transferors may have about the terms
used in the statutory form. They point out that most
users of the form will not understand the legal
consequences of a revocable TOD deed with life estate,
and the potential conflict between the life and
remainder interests which could result in a lawsuit
between the life tenant and the remainder person.
They insist that an individual who desires to create a
life estate in a RTOD deed instead of a trust should
have it professionally drafted to address the issues
that could arise under it.
IF A PERSON IS TO AVOID LITIGATION, SHOULD HE OR SHE
AVOID USING A REVOCABLE TOD DEED, ESPECIALLY THE
STATUTORY FORM?
d. Property transferred via RTOD deed would not carry
warranty of title
Under the bill, property that is transferred via a
revocable TOD deed is transferred without warranty of
title, and therefore probably not insurable. (Proposed
Sec. 5652(d).) Will this present a problem for the
beneficiary? Will title companies accept the
revocable TOD deed as a valid and insurable title?
Will it cost the beneficiary more to obtain title
insurance when the property is to be sold? Will the
beneficiary be able to get title insurance at all,
with or without an exclusion, and at what cost?
The California Land Title Association (CLTA) states
that they participated in several meetings of the CLRC
on the subject of the revocable TOD deed over the
course of a year. The CLTA, while extolling CLRC's
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hard work in analyzing the subject in depth and in
trying to address all possible problems associated
with the transfer of real property in a way that
effectuates the transferor's intent and avoids
litigation, nevertheless concluded that the TOD deed
"has developed into a complex and convoluted process
that will result in unwary consumers being confused
and caught up in unnecessary litigation," (Letter
dated April 10, 2008).
The CLTA explains their opposition thus:
Title companies rely upon the documents recorded in
the county recorder's office to determine the status
of title for real property. All title defects,
liens and encumbrances excluded from coverage are
listed in the preliminary report, usually triggering
the seller, buyer, and lender to address these title
problems through the escrow process.
CLTA fully expects that if AB 250 is enacted, some
transferors will execute more than one TOD deed over
the course of their life as their circumstances
change. Divorces, the death of spouses, estranged
children or addition of children through marriage,
etc., are just a few of the examples that come to
mind. Each of these changes could trigger the
execution and recordation of a new TOD deed to
effectuate a different transfer.
Thus, a "stacking" of these deeds in the public
records (or in file cabinets and recorded later)
would create ambiguity and uncertainty as to the
status of title and intent of the original
transferor. If there is ambiguity, out of an
abundance of caution the title company involved in a
transaction would likely resort to the use of
quitclaim deeds to resolve ambiguities, thus
rendering many - if not all - of the TOD deeds
essentially useless.
Echoing CLTA's remarks is the California Escrow
Association (CEA). The CEA believes that the TOD
process contemplated in AB 250 would lead to confusion
rather than clarity in the title transfer process.
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"Escrow officers are on the front lines in terms of
closing real estate transactions. They are in
constant contact with the title officers who must be
confident that property ownership is sufficiently
certain to issue title policies in these transactions.
Simply put, we are concerned that unsophisticated
parties will record multiple transfer on death deeds,
without understanding the legal significance of what
they are doing, resulting in great confusion when they
subsequently die." (Letter dated June 12, 2008.)
e. Revocable TOD deed is not a change in ownership
Under this bill, execution and recordation of a
revocable TOD deed is not a change in ownership that
would trigger a documentary transfer tax or filing of
a preliminary change of ownership report. However, on
the death of a transferor, the transfer would be
considered a change in ownership. Many people may
think that by transferring their property through a
RTOD deed, they would be able to escape capital gains
taxes, gift taxes, and estate taxes.
SHOULD THESE ISSUES BE ADDRESSED BY THE BILL?
6. Revocable TOD deed: Revocation
Under AB 250, a transferor who has testamentary capacity
may revoke a revocable transfer on death deed at any time
(Proposed Sec. 5630.). The bill also provides that a
revocable TOD deed remains revocable until death.
(Proposed Sec. 5614(a)(3).)
It is not clear if the revocable TOD deed becomes
irrevocable when the transferor becomes incapacitated.
How can a TOD deed remain revocable until death when it
can no longer be revoked due to incapacity?
SHOULD THIS BE CLARIFIED?
The CLRC in fact recognized that of the nine revocable
deed jurisdictions it studied, none addresses the
capacity issue. The CLRC states that the legal capacity
to make a will is a lower standard than the legal
capacity to make a real property transfer (or to revoke
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one?). "Presumably in those [nine] jurisdictions the
standard will be the higher standard of contractual
capacity, not the less demanding standard of testamentary
capacity, that prevails." Yet, the CLRC used
"testamentary capacity" as the standard in drafting AB
250.
According to the CLRC, the rationale for using
testamentary capacity rather than contractual capacity is
this: "if a will is challenged for lack of testamentary
capacity, that issue is resolved in a probate proceeding,
before transfer actually happens. A TOD deed passes
directly to the beneficiary, hence any challenge to the
transfer could only be retroactive, in a post-death
challenge. The revocable TOD deed is like a will,
because it is a donative transfer that takes effect on
death and is revocable until then. For that reason,
testamentary capacity should be sufficient to enable
execution of a revocable TOD deed. The possibility of
fraud, duress, or undue influence is controlled by
execution formalities and the availability of a
post-death challenge."
Proposed Sec. 5632 (a) requires that an instrument
revoking a revocable TOD deed be executed and recorded
before the transferor's death "in the same manner as
execution and recordation of a revocable transfer on
death deed."
An executed RTOD deed is not effective until the deed is
recorded, within 60 days of the execution of the deed.
This is expressly provided in proposed Section 5626(a).
In this context, the instrument of revocation should be
notarized and recorded within 60 days also, otherwise it
should not be effective.
IS THIS THE AUTHOR'S INTENT?
IF SO, SHOULD NOT THE BILL EXPRESSLY SO PROVIDE?
If a transferor executed and recorded a RTOD deed, then
later, while still with capacity, executed a valid will
that contained a provision revoking that RTOD deed and
then disposed of the same property, but the will was not
recorded (wills are not usually recorded; they are lodged
with the court at transferor's death and then probated),
AB 250 (DeVore)
Page 18 of ?
would the RTOD deed be deemed revoked or would it be the
operative instrument as to that property?
SHOULD THESE REVOCATION PROVISIONS BE FURTHER REVISED?
The CJA contends that AB 250 does not sufficiently
address the process of revocation of a RTOD deed. They
point out that a will is ineffective upon revocation, and
a revocation must be notarized and recorded, presumably
in the county where the property lies, not the one in
which the transferor resides. "Revocation then becomes
dependent on time, distance, office hours, and the
precise memory of the transferor. AB 250 ignores these
revocation factors and leaves unclear whether a
revocation may be filed outside the chain of title, or if
it is, then whether it is effective."
The vague revocation rules will likely provide fertile
ground for litigation. Here is yet another example.
Grandpa executes and records a RTOD deed, giving the
property to grandson. A year later, he revokes the first
RTOD deed and executes and delivers a deed to
granddaughter, making her a joint tenant with right of
survivorship. Granddaughter immediately records the new
deed, but Grandpa has failed to record a revocation of
the RTOD deed. Following Grandpa's intent, the
granddaughter should prevail but her deed is likely
without legal effect because Grandpa failed to record the
revocation in a timely manner. Even if the revocation is
recorded later, the granddaughter 's deed may still be
invalid unless the recording of the revocation relates
back to the execution.
7. Creditors: beneficiary is personally liable for
transferor's debts
Under AB 250 a creditor of the transferor who has an
encumbrance or lien of record against the property
transferred by a RTOD deed has priority over a creditor
of the beneficiary, regardless of whether the beneficiary
incurred the obligation before or after the transferor's
death and regardless of whether the obligation is secured
or unsecured, voluntary or involuntary, recorded or
AB 250 (DeVore)
Page 19 of ?
unrecorded.
A beneficiary is personally liable to a creditor for the
unsecured debts of the transferor, to the extent provided
under the bill. Because the goal of the RTOD deed is to
transfer property directly and thus avoid probate, the
only mechanism for collecting on outstanding liabilities
of the estate of transferor would be a civil action
against the RTOD deed beneficiary to restore or return
the property so it may be liquidated and distributed to
creditors.
The California Association of Public Administrators,
Public Guardians, and Public Conservators opposes AB 250
because it would jeopardize their ability to recover
their costs for administering the estate of a deceased.
[The] TOD deed transfers title to the grantor's
property to a beneficiary at the moment of death
like a joint tenancy interest, without any probate
procedure or court oversight. However, unlike joint
tenancy (a true non-probate transfer) the
beneficiary is still liable to the creditors of the
dead grantor. If no administration is opened, the
creditors can sue the beneficiary for what is owed
to them for one year after the date of death. If a
probate is opened, the personal representative [the
PA] can sue to recover only the shortage owed to the
creditors. If the suit is not opened within three
years of the date of death, it can never be opened.
This revocable, semi-joint tenancy,
nearly-non-probate transfer will create a lot of
confusion concerning decedent probate procedures,
creditor's rights, heir's rights, beneficiary's
liabilities and personal representative's obligation
to sue to recover assets that aren't exactly assets.
What the Public Administrators (PAs) are concerned about
is that under AB 250, a personal representative has the
right to ask or sue the beneficiary only for enough to
cover the shortage in what is owed to creditors. The PA
could be forced to bring a lawsuit under other sections
of the Probate Code (Sec. 9653, for example), and to ask
for extraordinary fees for the lawsuit. But even if they
did, payment would come from the estate, not the
AB 250 (DeVore)
Page 20 of ?
beneficiary who caused the lawsuit because he or she
would not pay the liability. PAs would be left with
filing fees and legal fees with no assets to pay for
them. "The whole structure is one that could encourage
many fraudulent transfers for numerous abusive reasons."
SHOULD NOT THIS BILL BE HELD UNTIL THE RISK OF FRAUDULENT
TRANSFERS IS ELIMINATED?
This group has recommended several major changes to AB
250 that are likely to result in the CLRC wanting to
revisit the elements of the bill.
8. The statutory forms
AB 250 would require a revocable TOD deed to be in a
standardized, uniform form in the state. Thus, in the
bill are three forms: a revocable TOD deed, a revocable
TOD deed with life estate, and a revocation form that is
usable for revoking either of the two deeds. Sample
forms are attached to this analysis.
9. Sunset date in 2014, CLRC report in 2013
This bill would sunset on January 1, 2014, unless another
act extends the statute or makes it permanent. The CLRC
would be required to report to the Legislature on or
before January 1, 2013, on various items, including
whether the revocable TOD deed is subject to misuse or
misunderstanding and whether it should be continued.
10. Arguments from supporters
The author states that all of the concerns about
potential abusers of senior citizens using a revocable
TOD deed to perpetrate fraud are equally applicable to
the other forms of real property transfer under current
law. Because the deed would be recorded, he states, the
fraudulent deed would be in the public record and would
be subject to discovery by others way before the
transferor's death.
An attorney who works for Area Agency on Aging (I) states
that he strongly believes that when enacted, AB 250 will
help avoid some of the most prevalent elder financial
abuse (trust mills). In addition, she states, "it will
AB 250 (DeVore)
Page 21 of ?
help countless seniors and other low-income California
residents leave their modest estates (often consisting
only of a home) to heirs without the expense of probate
or living trust."
Finally, a letter from a member of the Board of
Equalization states the bill would make it easier for
property to transfer from the decedent to their designee.
Current law adds unneeded expense to what should be a
simpler process, she stated.
11. Final comments
In fairness, several amendments to the bill have been
made to accommodate some of the concerns expressed both
in last year's analysis and by opponents of AB 250. In
addition a sunset date has been added to ensure the
statute would become inoperative automatically should a
spate of abuses occur over the next several years.
Still, the opponents came back with unabated concerns
that the rules for the execution and revocation of a
revocable TOD deed under AB 250 are not ready for
release to the unwary, the unsophisticated, vulnerable
population it is supposed to serve.
As the CLRC itself said, clarity is especially important
with regards to transfers of real property.
Relationships between people change, as people die,
become estranged, are institutionalized, get married,
divorced, part ways, rendering an earlier decision to
gift the real property inappropriate or ill-advised. The
one-size-fits all approach of the revocable transfer on
death deed may be its biggest weakness. "Historically a
'quick and easy' conveyancing instrument such as a
quitclaim deed is often the instrument of choice of a
perpetrator of fraud who preys on seniors and
unsophisticated consumers. Because it is easy to use,
cheap to record and does not require the use of an
attorney or other third party intermediary, it
facilitates fraud. The ease and simplicity of use
associated with the revocable TOD deed suggest that it
may lend itself to similar abuse."
AB 250 (DeVore)
Page 22 of ?
12. Attachments : Sample forms of the Revocable TOD Deeds
and Revocation (see pages 19-24 of this analysis).
Support: Michelle Steele, Board of Equalization; Sarah
Shena, Area I Agency on Aging; David Mandel,
California Senior Legal Hotline; Lambda Letters
Project; Howard Jarvis Taxpayers Association; Mary
Pat Toups, South Orange County Senior Centers
Oppose: California Land Title Association; California
Escrow Association; California Association of
Public Administrators, Public guardians, and Public
Conservators; California Judges Association
HISTORY
Source: California Law Revision Commission (Sponsor)
Pending related legislation: None Known
Previous Legislation: AB 12 (DeVore) Ch. 422, Stats. 2005.
See Background.
Prior Vote: Assembly Judiciary Committee (Ayes 10, Noes 0)
Assembly Appropriations Committee (Ayes 17, Noes
0)
Assembly Floor (Ayes 79, Noes 0)
**************
AB 250 (DeVore)
Page 23 of ?
Recording Requested By:
When Recorded Mail This Deed To
Name:
Address:
Assessor's Parcel Number:
____________________________________________________________
______________
Space Above For Recorder's Use
SIMPLE REVOCABLE TRANSFER ON DEATH (TOD) DEED
(California Probate Code Section 5642)
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
Use this deed to transfer the property described below
directly to your named beneficiaries when you die.
YOU SHOULD CAREFULLY READ ALL OF THE INFORMATION ON THE
OTHER SIDE 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 or it will not be
effective.
PROPERTY DESCRIPTION: Print the address or other legal
description of the property affected by this deed:
____________________________________________________________
__________________________
BENEFICIARY(IES): Print the NAME(S) of the person(s) who
will receive the property on your death.
(DO NOT use general terms like "my children"):
____________________________________________________________
__________________________
____________________________________________________________
__________________________
TRANSFER ON DEATH
AB 250 (DeVore)
Page 24 of ?
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:
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 complete and RECORD a SEPARATE deed.
ACKNOWLEDGMENT OF NOTARY
State of California )
County of ____________________)
On ( date ) 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 whose name is
subscribed to the within instrument and acknowledged to me
that he/she/ executed the same in his/her/ authorized
capacity, and that by his/her/ signature on the instrument
the person, or the entity upon behalf of which the person
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)
____________________________________________________________
__________________________
COMMON QUESTIONS ABOUT THE USE OF THIS FORM
AB 250 (DeVore)
Page 25 of ?
WHAT DOES THE TOD DEED DO?
When you die, your beneficiary will become owner of the
property described in the TOD deed. Probate is not
required. The TOD deed has no effect until you die. You can
revoke it at any time.
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 before your death or it has no effect.
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 affects 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, notarize, and RECORD a revocation form. (2)
Create and RECORD a new TOD deed, trust, or other estate
planning document that disposes of the same property. (3)
Sell or give away the property before your death and RECORD
the deed. A TOD deed can only affect property that you own
when you die.
IF I CREATE A NEW TOD DEED, TRUST, OR OTHER ESTATE PLANNING
DOCUMENT THAT DISPOSES OF THE SAME PROPERTY, DOES THAT
AUTOMATICALLY REVOKE A
RECORDED TOD DEED?
No. If you want the new document to revoke a recorded TOD
deed, the new document MUST be signed and dated after the
deed you wish to revoke and it must be RECORDED. To avoid
any doubt about whether the deed is revoked, you can also
complete and RECORD a revocation form.
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
AB 250 (DeVore)
Page 26 of ?
family member, friend, a 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.
If you want a different result, you should not use this
form. You MUST name your beneficiaries individually. You
MAY NOT use general terms to describe beneficiaries, such
as "my children.''
WHAT IF A BENEFICIARY DIES BEFORE I DO?
You should probably create and RECORD a new deed.
Otherwise, the property will transfer according
to the general rules on failed gifts, which may not meet
your needs. See Prob. Code 21110-21111.
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. If you wish to avoid gift and estate taxes you should
consult a tax professional for advice.
HOW DOES THE TOD DEED AFFECT PROPERTY TAXES?
AB 250 (DeVore)
Page 27 of ?
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?
If your estate is subject to reimbursement, any property
transferred by a TOD deed will also be subject to
reimbursement.
AB 250 (DeVore)
Page 28 of ?
Recording Requested By:
When Recorded Mail This Deed To
Name:
Address:
Assessor's Parcel
Number:_____________________________________________________
_____________________
Space Above For Recorder's Use
REVOCABLE TRANSFER ON DEATH (TOD) DEED WITH LIFE ESTATE
(California Probate Code Section 5643)
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
Use this deed to create a life estate in a named life
tenant, with a remainder interest in the named remainder
beneficiaries. When you die, the identified property will
transfer to the "life tenant" for the duration of that
person's life. After that person's death, the property will
transfer to your "remainder beneficiary(ies)." This is a
complex arrangement that may cause disputes between the
life tenant and remainder beneficiaries. You should consult
an attorney before choosing to use this form.
YOU SHOULD CAREFULLY READ ALL OF THE INFORMATION ON THE
OTHER SIDE 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 or it will not be
effective.
PROPERTY DESCRIPTION: Print the address or other legal
description of the property affected by this deed:
____________________________________________________________
__________________________
LIFE TENANT: Print the NAME of the life tenant:
_______________________________________________________
AB 250 (DeVore)
Page 29 of ?
REMAINDER BENEFICIARY(IES): Print the NAME(S) of the
person(s) who will receive the property on your death (DO
NOT use general terms like "my children").
____________________________________________________________
__________________________
____________________________________________________________
__________________________
TRANSFER ON DEATH
I transfer all of my interest in the described property on
my death, as follows: a life estate to the person named as
life tenant, with a remainder to the person(s) named as
remainder beneficiary(ies). 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:
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 complete and RECORD a SEPARATE deed.
ACKNOWLEDGMENT OF NOTARY
State of California )
County of ____________________)
On ( date ) 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 whose name is
subscribed to the within instrument and acknowledged to me
that he/she/ executed the same in his/her/ authorized
capacity, and that by his/her/ signature on the instrument
the person, or the entity upon behalf of which the person
acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the
AB 250 (DeVore)
Page 30 of ?
State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature ___________________________ (Seal)
____________________________________________________________
____________
COMMON QUESTIONS ABOUT THE USE OF THIS FORM
WHAT DOES THE TOD DEED DO?
When you die, the identified property will transfer to the
"life tenant" for the duration of that person's life.
After that person's death, the property will transfer to
your "remainder beneficiary(ies)." Probate is not required
for a transfer under this deed. The deed has no effect
until you die. You can revoke it at any time.
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 before your death or it has no effect.
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 affects 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, notarize, and RECORD a revocation form. (2)
Create and RECORD a new TOD deed, trust, or other estate
planning document that disposes of the same property. (3)
Sell or give away the property before your death and RECORD
the deed. A TOD deed can only affect property that you own
when you die.
AB 250 (DeVore)
Page 31 of ?
IF I CREATE A NEW TOD DEED, TRUST, OR OTHER ESTATE PLANNING
DOCUMENT THAT DISPOSES OF THE SAME PROPERTY, DOES THAT
AUTOMATICALLY REVOKE A
RECORDED TOD DEED?
No. If you want the new document to revoke a recorded TOD
deed, the new document MUST be signed and dated after the
deed you wish to revoke and it must be RECORDED. To avoid
any doubt about whether the deed is revoked, you can also
complete and RECORD a revocation form.
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, a 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 REMAINDER BENEFICIARY?
Your remainder beneficiaries will become co-owners in equal
shares. If you want a different result, you should not use
this form. You MUST name your beneficiaries individually.
You MAY NOT use general terms to describe beneficiaries,
such as "my children.'' You MAY NOT name more than one life
tenant.
WHAT IF A BENEFICIARY DIES BEFORE I DO?
You should probably create and RECORD a new deed.
Otherwise, the property will transfer according
to the general rules on failed gifts, which may not meet
your needs. See Prob. Code 21110-21111.
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
AB 250 (DeVore)
Page 32 of ?
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. If you wish to avoid gift and estate taxes you should
consult a tax professional for advice.
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?
If your estate is subject to reimbursement, any property
transferred by a TOD deed will also be subject to
reimbursement.