What Is Assembly Bill 139?
On September 21 of 2015, Assembly Bill number 139 was approved by the Governor of California and filed with the Secretary of State with regards to the creation of “revocable transfer upon death deeds” (RTDD) that would facilitate the non-probate transfer of real estate. Effectively, the bill provides a method for the owners of real estate to ensure that a piece of property is expeditiously transferred to the intended beneficiary without the review of a probate court. The bill is in place until January 1 of 2021, after which the creation of new RTDDs will depend on an extension of the bill. All RTDDs created during the bill’s tenure will last until otherwise revoked.
Why the Need for a Change?
While probate courts serve the purpose of resolving the complicated affairs of large estates upon a person’s passing, they are primarily intended for superfluous assets that have a high value. Normally, you can bypass the probate courts for pay-on-death accounts, estates whose total value is less than $150,000, or items valuing less than $100,000 if you so choose, but most pieces of real estate will have values far exceeding the limit of the simplified procedures. The courts can be held up for as long as a year under normal circumstances if there are legal concerns, holding the real estate in limbo until the matter is resolved. If there are more complicated issues and concerted legal efforts on multiple sides, it can go on indefinitely. The legal fees associated with a probate court average at $26,000.
When the property is a family home, this mire of time and money creates a staggering upheaval in the lives of survivors that is unneeded.
What Protections Are in Place Against Abuses of the RTDD?
At any time, issuing a new RTDD will override any previously issued RTDDs.
If a person is found to have committed a felony resulting in the death of the decedent or intentionally brought about their death through any means, then the terms of the RTDD are nullified. This is the same as any other form of transfer upon death, including those that normally go through the probate courts, as a basic legal precaution against rewarding people for murder. There is also a 120-day moratorium on selling a home after receiving it due to an RTDD to limit its potential usefulness in confidence schemes.
Should You Consider an RTDD?
An RTDD will be a valuable tool for leaving property to those who may occupy a special place in your life yet not fall under the definition of family. If you have a lifelong romantic partner, a friend, or another person you find deserving for your own reasons, then you can leave have the notarized deed guarantee that they will receive the real estate.
The deed is also a way to reduce some of the estate costs that will cut into your legacy without the legal complication of estate planning or forming a trust.
Ultimately, the RTDD is a new tool that homeowners can use to ensure that their property moves as intended after their death with low costs and relative ease. You should keep the possibility of using a revocable transfer upon death deed made possible by Assembly Bill 139 in mind when purchasing a new home or planning your estate.