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You Can Now Transfer a Home Without a Trust or Probate

New-California-Property-Transfer-Law

After sailing through the California Assembly and Senate with votes of 78-0 and 40-0, respectively, Governor Jerry Brown signed AB 139, a law that went into effect on January 1st of this year. AB 139 allows people who own homes—as well as multi-family investment properties with up to four units—to transfer their properties without having to go through probate or create a living trust. While these transfers are not ideal for every estate planning situation, they can be an easy and cost-efficient method for many to transfer their real property without probate upon their death.

The New Alternative for Property Transfer

Instead, AB 139 called for the creation of a form called a “Simple Revocable Transfer on Death (TOD) Deed.” On it, a property owner fills in the necessary information identifying the property in question, lists the name(s) of the beneficiary or beneficiaries to whom the owner wishes to receive the property, and signs and dates it. The owner then has it notarized, and recorded at the county clerk’s office within 60 days.

Given the name of the form, it may be obvious that the property transfer only takes effect upon the death of the original property owner. Until then, beneficiaries have no access to the property, and the original owner can change their mind at any time by filing either a new transfer on death deed, or a revocation form.

The new Transfer on Death system has huge advantages for low-income and single property owners. Before the passage of AB 139, property owners had to spend anywhere between $2,000 and $6,000 dollars on a lawyer in order to create a living trust, or cost their heirs tens of thousands of dollars by going through the probate system.

Now, residents of Sacramento and the rest of California can take care of the entire process of filing a property transfer by paying $10 to have the form notarized, and an additional $15 to have the local County Clerk record the one page document.

Protections for Elderly People

The law takes special care to protect the well-being of elderly people who might be persuaded by financial predators to file property transfers. If a child or other close relative discovers within 120 days of the death of a loved one that they wrongly transferred a property, the relative can file a complaint in court, submit a notice that a lawsuit is being filed (“lis pendens”), and then send a copy to the believed financial predator. This prevents the sale or retransfer of the property until the lawsuit has been settled.

Resources

The Sacramento County Public Law Library has made copies of the new Transfer on Death Deed available for download. The form can be downloaded as either a PDF or an RTF (which can be edited with word processing programs such as Microsoft Word). The site also offers instructions on filling out the form, as well as a Transfer on Death Deed Wizard, which will guide you step by step through the process of filling out the form, and then email you a copy of the completed form.

Once you have completed the form and had it notarized (notaries can be found easily by using Google, and many banks, credit unions, and shipping services have a notary on staff), Sacramento residents can file it with the Sacramento County Recorder, whose site can be found here. Residents of other counties can locate their local county recorder’s office by Googling for “[your county] county clerk.”

Questions?

If you would like more information on your legal options for transferring real estate property to loved ones or other beneficiaries, you can contact the legal team at Toeppen & Grevious by using the contact form on our site, or by calling us at 916-400-4516.