BILL ANALYSIS Ó
AB 139
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Date of Hearing: March 25, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
139 (Gatto) - As Amended March 5, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill, until January 1, 2021, establishes a new, non-probate
method for conveying real property upon death through a
"revocable transfer upon death deed" (RTDD). Specifically, this
bill:
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1)Allows an interest in real property to be transferred on death
by recording a RTDD signed and acknowledged by the record
owner of the property and designating a beneficiary or
beneficiaries. The deed transfers ownership of that property
interest upon the death of the owner.
2)Provides an RTDD form in statute, and provides a statutory
form for revocation of an RTDD. The RTDD form provides
information to the transferor, including explaining how the
RTDD works, how it is effectuated and some of its
consequences.
3)Provides that property subject to RTDD is still part of
transferor's estate for purposes of Medi-Cal eligibility and
will be subject to Medi-Cal reimbursement claims.
4)Requires the California Law Revision Commission (CLRC) to
study the impacts of RTDDs and report its findings and
recommendations to the Legislature by January 2020.
FISCAL EFFECT:
1)Absorbable costs for the CLRC's study and report.
2)Potential minor savings in probate court costs and backlogs.
COMMENTS:
1)Background and Purpose. AB 12 (DeVore)/Chapter 422 of 2005,
directed the CLRC to study California's non-probate transfer
provisions and determine whether California should enact a
beneficiary deed--a deed which transfers real property outside
of probate upon death of the transferor. In October 2006, the
CLRC issued its recommendation that California adopt a
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revocable transfer on death deed, noting that while the deed
has advantages and disadvantages, creation of such a deed
would, on the whole, be beneficial in California.
According to the author, "Unlike California, more than
twenty other states, including Oregon, Washington,
Colorado, Illinois, and Arizona, offer what is called a
"Revocable Transfer on Death" Deed. The tool is a
nonprobate mechanism for transferring property directly
to one (or more) beneficiaries? Although other estate
planning options are available to property owners, the
Revocable Transfer on Death Deed is the most simple and
inexpensive transfer mechanism on the market today.
Furthermore, it may be the only tool available to
unmarried homeowners who wish to leave their property to
a lifelong partner, family member, friend or loved one
upon death, but who do not want to transfer present
interest (such as joint tenancy) or cannot afford to set
up a trust."
2)Prior Legislation. Three very similar bills-AB 699
(Wagner, 2011), AB 724 (Devore, 2009-10, and AB 250
(Devore, 2007)-have passed the Assembly but failed in the
Senate.
3)Opposition. California Escrow Association and California
Land Title Association believe that if this bill becomes
law, RTDDs "will become the new form of easy, convenient,
and cheap elder abuse." In addition, they believe the
RTDD is complex and, when used by transferors without
advice from legal counsel, could well create confusion
and ambiguity that could cloud the property's title.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081
AB 139
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