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Sure, you'll have to die to take advantage of AB139, but it might be worth it. The new law, which goes into effect January 1st, lets Californians transfer real property to their heirs without going through probate.
California's new revocable transfer on death deed is an exciting new weapon in your estate planning arsenal. Here's why.
Sixth Time's a Charm for AB139
Probate is a pain. (Though fees for probate can be quite substantial.) Luckily, good estate planning can your help clients avoid probate altogether, which is exactly what estate planning lawyers have been doing for years. Except, should someone die today, their real property would likely have to go through the probate process. Starting January 1st, future-decedents will have an easy way around that.
AB139, which was passed in September, creates a relatively simple revocable transfer on death deed. Though revocable TOD deeds have been available in about half the states for awhile, California has long resisted allowing them. Revocable TOD legislation had failed in the state assembly at least six times before it was approved in September, according to the San Francisco Chronicle.
Resistance to the deeds was largely based on the fear that the elderly could be duped into signing away their homes. To address those concerns, AB139 creates a process to challenge revocable TODs or disqualify a beneficiary.
Who Will Benefit From the New Deeds?
The new revocable TOD deeds are best for single property owners: widows, widowers, old maids, and life-long bachelors. Married couples typically avoid probate on property transfers by sharing real property as community property or in joint tenancy. Others avoid it through trusts, which can be costly.
Creating a revocable TOD deed is simple. Indeed, the legislation includes a model revocable transfer on death deed that is brief enough to fit on a single page. Identify the property, fill in a few names, get the thing notarized and filed with the county and, voila, you're done.
According to Blanca Castro, the California advocacy director of the AARP, the new deed "is a fairly easy, straightforward and relatively inexpensive way for California residents to transfer their real property, which by and large is people's most valuable asset."