A new law, AB 139, effective as of January 1, 2016 creates a non-probate method for conveying interest in real property upon death and thus can save middle-class Californians thousands of dollars. The law simplifies the way real property assets are transferred to a beneficiary upon death through use of a simple form. Transfer is accomplished by means of a revocable transfer upon death deed (also known as RTDD). The RTDD automatically transfers ownership of the property upon the death of the owner. The RTDD is allowable for 1-4 residential units, a condo, or agricultural land of 40 acres or less which contains a single family residence.
Previously, homeowners had two costly options: hire an attorney to draft a trust (which typically costs homeowners between $2,000 and $6,000) or force surviving loved ones to weather the probate process (which also has significant costs).
The document MUST be recorded at the county where the property is located within 60 days of notarizing it.
The new law makes the RTDD effective for any 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 No RTDD may be executed on or after January 1, 2021, which is when the new law is scheduled to be repealed (unless extended by the legislature prior to that date). The deed is only effective at death and does not affect any ownership rights during the transferor’s lifetime.
The law helps homeowners avoid costly probate fees and unintended burdens on family members and should be good news for those who cannot afford to have a trust set up.