BILL NUMBER: AB 139 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 26, 2015
AMENDED IN SENATE JULY 15, 2015
AMENDED IN SENATE JUNE 29, 2015
AMENDED IN ASSEMBLY MARCH 5, 2015
INTRODUCED BY Assembly Member Gatto
(Coauthors: Assembly Members Chávez, Mayes, and Waldron)
JANUARY 9, 2015
An act to amend Sections 2337 and 2040 of the Family Code, to
amend Sections 250, 267, 279, 2580, 5000, 5302, 13111, 13206, and
13562 of, to amend and renumber Sections 5600, 5601, 5602, 5603, and
5604 of, to add Section 69 to, to add the heading of Chapter 3
(commencing with Section 5040) to Part 1 of Division 5 of, to add and
repeal Part 4 (commencing with Section 5600) of Division 5 of, and
to repeal the heading of Part 4 (commencing with Section 5600) of
Division 5 of, the Probate Code, relating to nonprobate transfers.
LEGISLATIVE COUNSEL'S DIGEST
AB 139, as amended, Gatto. Nonprobate transfers: revocable
transfer upon death deeds.
(1) Existing law provides that a person may pass real property to
a beneficiary at death by various methods including by will,
intestate succession, trust, and titling the property in joint
tenancy, among others.
This bill would, until January 1, 2021, create the revocable
transfer on death deed (revocable TOD deed), as defined, which would
transfer real property on the death of its owner without a probate
proceeding, according to specified rules. The bill would require that
a person have the capacity to contract in order to make or revoke
the deed and would require that the deed be in a statutory form
provided for this purpose. The bill would require that a revocable
TOD deed be signed, dated, acknowledged, and recorded, as specified,
to be effective. The bill would provide, among other things, that the
deed, during the owner's life, does not affect his or her ownership
rights and, specifically, is part of the owner's estate for the
purpose of Medi-Cal eligibility and reimbursement. The bill would
void a revocable TOD deed if, at the time of the owner's death, the
property is titled in joint tenancy or as community property with
right of survivorship. The bill would establish priorities for
creditor claims against the owner and the beneficiary of the deed in
connection with the property transferred and limits on the liability
of the beneficiary. The bill would establish a process for contesting
the transfer of real property by a revocable TOD deed. The bill
would make other conforming and technical changes. The bill would
require the California Law Revision Commission to study and make
recommendations regarding the revocable TOD deed to the Legislature
by January 1, 2020.
(2) Existing law provides that a person who feloniously and
intentionally kills a decedent is not entitled to specified property,
interests, or benefits, including any gifts of personal property
made in view of impending death.
This bill would specify that a person who feloniously and
intentionally kills a decedent is not entitled generally to property
and interests that are transferred outside of probate, including real
property transferred by a revocable TOD deed.
(3) Existing law establishes simplified procedures for dealing
with a decedent's estate valued under $150,000, including authorizing
the successor of the decedent to collect and distribute property due
the decedent without letters of administration or awaiting probate
of a will. Existing law provides that a beneficiary who receives real
or personal property under these circumstances, as specified, may be
liable to the estate if probate proceedings are subsequently
commenced. Existing law provides, in this context, that a spouse has
liability for the debts of a deceased spouse if the decedent's
property is in the control of the surviving spouse. Existing law
permits a court judgment to enforce liability in these instances only
to the extent necessary to protect the heirs, devisees, and
creditors of the decedent.
This bill would delete the reference to court judgment and provide
instead that the personal representative of the estate is permitted
to enforce liability only to the extent necessary to protect the
heirs, devisees, and creditors of the decedent.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 2337 of the Family Code is amended to read:
2337. (a) In a proceeding for dissolution of marriage, the court,
upon noticed motion, may sever and grant an early and separate trial
on the issue of the dissolution of the status of the marriage apart
from other issues.
(b) A preliminary declaration of disclosure with a completed
schedule of assets and debts shall be served on the nonmoving party
with the noticed motion unless it has been served previously, or
unless the parties stipulate in writing to defer service of the
preliminary declaration of disclosure until a later time.
(c) The court may impose upon a party any of the following
conditions on granting a severance of the issue of the dissolution of
the status of the marriage, and in case of that party's death, an
order of any of the following conditions continues to be binding upon
that party's estate:
(1) The party shall indemnify and hold the other party harmless
from any taxes, reassessments, interest, and penalties payable by the
other party in connection with the division of the community estate
that would not have been payable if the parties were still married at
the time the division was made.
(2) Until judgment has been entered on all remaining issues and
has become final, the party shall maintain all existing health and
medical insurance coverage for the other party and any minor children
as named dependents, so long as the party is eligible to do so. If
at any time during this period the party is not eligible to maintain
that coverage, the party shall, at the party's sole expense, provide
and maintain health and medical insurance coverage that is comparable
to the existing health and medical insurance coverage to the extent
it is available. To the extent that coverage is not available, the
party shall be responsible to pay, and shall demonstrate to the court'
s satisfaction the ability to pay, for the health and medical care
for the other party and the minor children, to the extent that care
would have been covered by the existing insurance coverage but for
the dissolution of marital status, and shall otherwise indemnify and
hold the other party harmless from any adverse consequences resulting
from the loss or reduction of the existing coverage. For purposes of
this subdivision, "health and medical insurance coverage" includes
any coverage for which the parties are eligible under any group or
individual health or other medical plan, fund, policy, or program.
(3) Until judgment has been entered on all remaining issues and
has become final, the party shall indemnify and hold the other party
harmless from any adverse consequences to the other party if the
bifurcation results in a termination of the other party's right to a
probate homestead in the residence in which the other party resides
at the time the severance is granted.
(4) Until judgment has been entered on all remaining issues and
has become final, the party shall indemnify and hold the other party
harmless from any adverse consequences to the other party if the
bifurcation results in the loss of the rights of the other party to a
probate family allowance as the surviving spouse of the party.
(5) Until judgment has been entered on all remaining issues and
has become final, the party shall indemnify and hold the other party
harmless from any adverse consequences to the other party if the
bifurcation results in the loss of the other party's rights with
respect to any retirement, survivor, or deferred compensation
benefits under any plan, fund, or arrangement, or to any elections or
options associated therewith, to the extent that the other party
would have been entitled to those benefits or elections as the spouse
or surviving spouse of the party.
(6) The party shall indemnify and hold the other party harmless
from any adverse consequences if the bifurcation results in the loss
of rights to social security benefits or elections to the extent the
other party would have been entitled to those benefits or elections
as the surviving spouse of the party.
(7) (A) The court may make an order pursuant to paragraph (3) of
subdivision (b) of Section 5040 of the Probate Code, if appropriate,
that a party maintain a beneficiary designation for a nonprobate
transfer, as described in Section 5000 of the Probate Code, for a
spouse or domestic partner for up to one-half of or, upon a showing
of good cause, for all of a nonprobate transfer asset until judgment
has been entered with respect to the community ownership of that
asset, and until the other party's interest therein has been
distributed to him or her.
(B) Except upon a showing of good cause, this paragraph does not
apply to any of the following:
(i) A nonprobate transfer described in Section 5000 of the Probate
Code that was not created by either party or that was acquired by
either party by gift, descent, or devise.
(ii) An irrevocable trust.
(iii) A trust of which neither party is the grantor.
(iv) Powers of appointment under a trust instrument that was not
created by either party or of which neither party is a grantor.
(v) The execution and filing of a disclaimer pursuant to Part 8
(commencing with Section 260) of Division 2 of the Probate Code.
(vi) The appointment of a party as a trustee.
(8) In order to preserve the ability of the party to defer the
distribution of the Individual Retirement Account or annuity (IRA)
established under Section 408 or 408A of the Internal Revenue Code of
1986, as amended, (IRC) upon the death of the other party, the court
may require that one-half, or all upon a showing of good cause, of
the community interest in any IRA, by or for the benefit of the
party, be assigned and transferred to the other party pursuant to
Section 408(d)(6) of the Internal Revenue Code. This paragraph does
not limit the power granted pursuant to subdivision (g).
(9) Upon a showing that circumstances exist that would place a
substantial burden of enforcement upon either party's community
property rights or would eliminate the ability of the surviving party
to enforce his or her community property rights if the other party
died before the division and distribution or compliance with any
court-ordered payment of any community property interest therein,
including, but not limited to, a situation in which preemption under
federal law applies to an asset of a party, or purchase by a bona
fide purchaser has occurred, the court may order a specific security
interest designed to reduce or eliminate the likelihood that a
postmortem enforcement proceeding would be ineffective or unduly
burdensome to the surviving party. For this purpose, those orders may
include, but are not limited to, any of the following:
(A) An order that the party provide an undertaking.
(B) An order to provide a security interest by Qualified Domestic
Relations Order from that party's share of a retirement plan or
plans.
(C) An order for the creation of a trust as defined in paragraph
(2) of subdivision (a) of Section 82 of the Probate Code.
(D) An order for other arrangements as may be reasonably necessary
and feasible to provide appropriate security in the event of the
party's death before judgment has been entered with respect to the
community ownership of that asset, and until the other party's
interest therein has been distributed to him or her.
(E) If a retirement plan is not subject to an enforceable court
order for the payment of spousal survivor benefits to the other
party, an interim order requiring the party to pay or cause to be
paid, and to post adequate security for the payment of, any survivor
benefit that would have been payable to the other party on the death
of the party but for the judgment granting a dissolution of the
status of the marriage, pending entry of judgment on all remaining
issues.
(10) Any other condition the court determines is just and
equitable.
(d) Prior to, or simultaneously with, entry of judgment granting
dissolution of the status of the marriage, all of the following shall
occur:
(1) The party's retirement or pension plan shall be joined as a
party to the proceeding for dissolution, unless joinder is precluded
or made unnecessary by Title 1 of the federal Employee Retirement
Income Security Act of 1974 (29 U.S.C. Sec. 1001 et seq.), as amended
(ERISA), or any other applicable law.
(2) To preserve the claims of each spouse in all retirement plan
benefits upon entry of judgment granting a dissolution of the status
of the marriage, the court shall enter one of the following in
connection with the judgment for each retirement plan in which either
party is a participant:
(A) An order pursuant to Section 2610 disposing of each party's
interest in retirement plan benefits, including survivor and death
benefits.
(B) An interim order preserving the nonemployee party's right to
retirement plan benefits, including survivor and death benefits,
pending entry of judgment on all remaining issues.
(C) An attachment to the judgment granting a dissolution of the
status of the marriage, as follows:
EACH PARTY (insert names and addresses) IS PROVISIONALLY AWARDED
WITHOUT PREJUDICE AND SUBJECT TO ADJUSTMENT BY A SUBSEQUENT DOMESTIC
RELATIONS ORDER, A SEPARATE INTEREST EQUAL TO ONE-HALF OF ALL
BENEFITS ACCRUED OR TO BE ACCRUED UNDER THE PLAN (name each plan
individually) AS A RESULT OF EMPLOYMENT OF THE OTHER PARTY DURING THE
MARRIAGE OR DOMESTIC PARTNERSHIP AND PRIOR TO THE DATE OF
SEPARATION. IN ADDITION, PENDING FURTHER NOTICE, THE PLAN SHALL, AS
ALLOWED BY LAW, OR IN THE CASE OF A GOVERNMENTAL PLAN, AS ALLOWED BY
THE TERMS OF THE PLAN, CONTINUE TO TREAT THE PARTIES AS MARRIED OR
DOMESTIC PARTNERS FOR PURPOSES OF ANY SURVIVOR RIGHTS OR BENEFITS
AVAILABLE UNDER THE PLAN TO THE EXTENT NECESSARY TO PROVIDE FOR
PAYMENT OF AN AMOUNT EQUAL TO THAT SEPARATE INTEREST OR FOR ALL OF
THE SURVIVOR BENEFIT IF AT THE TIME OF THE DEATH OF THE PARTICIPANT,
THERE IS NO OTHER ELIGIBLE RECIPIENT OF THE SURVIVOR BENEFIT.
(e) The moving party shall promptly serve a copy of any order,
interim order, or attachment entered pursuant to paragraph (2) of
subdivision (d), and a copy of the judgment granting a dissolution of
the status of the marriage, on the retirement or pension plan
administrator.
(f) A judgment granting a dissolution of the status of the
marriage shall expressly reserve jurisdiction for later determination
of all other pending issues.
(g) If the party dies after the entry of judgment granting a
dissolution of marriage, any obligation imposed by this section shall
be enforceable against any asset, including the proceeds thereof,
against which these obligations would have been enforceable prior to
the person's death.
SEC. 2. Section 2040 of the Family Code is amended to read:
2040. (a) In addition to the contents required by Section 412.20
of the Code of Civil Procedure, the summons shall contain a temporary
restraining order:
(1) Restraining both parties from removing the minor child or
children of the parties, if any, from the state, or from applying for
a new or replacement passport for the minor child or children,
without the prior written consent of the other party or an order of
the court.
(2) Restraining both parties from transferring, encumbering,
hypothecating, concealing, or in any way disposing of any property,
real or personal, whether community, quasi-community, or separate,
without the written consent of the other party or an order of the
court, except in the usual course of business or for the necessities
of life, and requiring each party to notify the other party of any
proposed extraordinary expenditures at least five business days
before incurring those expenditures and to account to the court for
all extraordinary expenditures made after service of the summons on
that party.
Notwithstanding the foregoing, nothing in the restraining order
shall preclude a party from using community property, quasi-community
property, or the party's own separate property to pay reasonable
attorney's fees and costs in order to retain legal counsel in the
proceeding. A party who uses community property or quasi-community
property to pay his or her attorney's retainer for fees and costs
under this provision shall account to the community for the use of
the property. A party who uses other property that is subsequently
determined to be the separate property of the other party to pay his
or her attorney's retainer for fees and costs under this provision
shall account to the other party for the use of the property.
(3) Restraining both parties from cashing, borrowing against,
canceling, transferring, disposing of, or changing the beneficiaries
of any insurance or other coverage, including life, health,
automobile, and disability, held for the benefit of the parties and
their child or children for whom support may be ordered.
(4) Restraining both parties from creating a nonprobate transfer
or modifying a nonprobate transfer in a manner that affects the
disposition of property subject to the transfer, without the written
consent of the other party or an order of the court.
(b) Nothing in this section restrains any of the following:
(1) Creation, modification, or revocation of a will.
(2) Revocation of a nonprobate transfer, including a revocable
trust, pursuant to the instrument, provided that notice of the change
is filed and served on the other party before the change takes
effect.
(3) Elimination of a right of survivorship to property, provided
that notice of the change is filed and served on the other party
before the change takes effect.
(4) Creation of an unfunded revocable or irrevocable trust.
(5) Execution and filing of a disclaimer pursuant to Part 8
(commencing with Section 260) of Division 2 of the Probate Code.
(c) In all actions filed on and after January 1, 1995, the summons
shall contain the following notice:
"WARNING: California law provides that, for purposes of division
of property upon dissolution of marriage or legal separation,
property acquired by the parties during marriage in joint form is
presumed to be community property. If either party to this action
should die before the jointly held community property is divided, the
language of how title is held in the deed (i.e., joint tenancy,
tenants in common, or community property) will be controlling and not
the community property presumption. You should consult your attorney
if you want the community property presumption to be written into
the recorded title to the property."
(d) For the purposes of this section:
(1) "Nonprobate transfer" means an instrument, other than a will,
that makes a transfer of property on death, including a revocable
trust, pay on death account in a financial institution, Totten trust,
transfer on death registration of personal property, revocable
transfer on death deed, or other instrument of a type described in
Section 5000 of the Probate Code.
(2) "Nonprobate transfer" does not include a provision for the
transfer of property on death in an insurance policy or other
coverage held for the benefit of the parties and their child or
children for whom support may be ordered, to the extent that the
provision is subject to paragraph (3) of subdivision (a).
(e) The restraining order included in the summons shall include
descriptions of the notices required by paragraphs (2) and (3) of
subdivision (b).
SEC. 3. Section 69 is added to the Probate Code, to read:
69. "Revocable transfer on death deed" or "revocable TOD deed"
means a revocable transfer on death deed as described in Section
5614.
SEC. 4. Section 250 of the Probate Code is amended to read:
250. (a) A person who feloniously and intentionally kills the
decedent is not entitled to any of the following:
(1) Any property, interest, or benefit under a will of the
decedent, or a trust created by or for the benefit of the decedent or
in which the decedent has an interest, including any general or
special power of appointment conferred by the will or trust on the
killer and any nomination of the killer as executor, trustee,
guardian, or conservator or custodian made by the will or trust.
(2) Any property of the decedent by intestate succession.
(3) Any of the decedent's quasi-community property the killer
would otherwise acquire under Section 101 or 102 upon the death of
the decedent.
(4) Any property of the decedent under Division 5 (commencing with
Section 5000).
(5) Any property of the decedent under Part 3 (commencing with
Section 6500) of Division 6.
(b) In the cases covered by subdivision (a):
(1) The property interest or benefit referred to in paragraph (1)
of subdivision (a) passes as if the killer had predeceased the
decedent and Section 21110 does not apply.
(2) Any property interest or benefit referred to in paragraph (1)
of subdivision (a) which passes under a power of appointment and by
reason of the death of the decedent passes as if the killer had
predeceased the decedent, and Section 673 does not apply.
(3) Any nomination in a will or trust of the killer as executor,
trustee, guardian, conservator, or custodian which becomes effective
as a result of the death of the decedent shall be interpreted as if
the killer had predeceased the decedent.
SEC. 5. Section 267 of the Probate Code is amended to read:
267. (a) "Interest" includes the whole of any property, real or
personal, legal or equitable, or any fractional part, share, or
particular portion or specific assets thereof, or any estate in any
such property, or any power to appoint, consume, apply, or expend
property, or any other right, power, privilege, or immunity relating
to property.
(b) "Interest" includes, but is not limited to, an interest
created in any of the following manners:
(1) By intestate succession.
(2) Under a will.
(3) Under a trust.
(4) By succession to a disclaimed interest.
(5) By virtue of an election to take against a will.
(6) By creation of a power of appointment.
(7) By exercise or nonexercise of a power of appointment.
(8) By an inter vivos gift, whether outright or in trust.
(9) By surviving the death of a depositor of a Totten trust
account or P.O.D. account.
(10) Under an insurance or annuity contract.
(11) By surviving the death of another joint tenant.
(12) Under an employee benefit plan.
(13) Under an individual retirement account, annuity, or bond.
(14) Under a transfer on death beneficiary designation in a deed
or other instrument.
(15) Any other interest created by a testamentary or inter vivos
instrument or by operation of law.
SEC. 6. Section 279 of the Probate Code is amended to read:
279. (a) A disclaimer to be effective shall be filed within a
reasonable time after the person able to disclaim acquires knowledge
of the interest.
(b) In the case of any of the following interests, a disclaimer is
conclusively presumed to have been filed within a reasonable time if
it is filed within nine months after the death of the creator of the
interest or within nine months after the interest becomes
indefeasibly vested, whichever occurs later:
(1) An interest created under a will.
(2) An interest created by intestate succession.
(3) An interest created pursuant to the exercise or nonexercise of
a testamentary power of appointment.
(4) An interest created by surviving the death of a depositor of a
Totten trust account or P.O.D. account.
(5) An interest created under a life insurance or annuity
contract.
(6) An interest created by surviving the death of another joint
tenant.
(7) An interest created under an employee benefit plan.
(8) An interest created under an individual retirement account,
annuity, or bond.
(9) An interest created under a transfer on death beneficiary
designation in a deed or other instrument.
(c) In the case of an interest created by a living trust, an
interest created by the exercise of a presently exercisable power of
appointment, an outright inter vivos gift, a power of appointment, or
an interest created or increased by succession to a disclaimed
interest, a disclaimer is conclusively presumed to have been filed
within a reasonable time if it is filed within nine months after
whichever of the following times occurs latest:
(1) The time of the creation of the trust, the exercise of the
power of appointment, the making of the gift, the creation of the
power of appointment, or the disclaimer of the disclaimed property.
(2) The time the first knowledge of the interest is acquired by
the person able to disclaim.
(3) The time the interest becomes indefeasibly vested.
(d) In case of an interest not described in subdivision (b) or
(c), a disclaimer is conclusively presumed to have been filed within
a reasonable time if it is filed within nine months after whichever
of the following times occurs later:
(1) The time the first knowledge of the interest is acquired by
the person able to disclaim.
(2) The time the interest becomes indefeasibly vested.
(e) In the case of a future estate, a disclaimer is conclusively
presumed to have been filed within a reasonable time if it is filed
within whichever of the following times occurs later:
(1) Nine months after the time the interest becomes an estate in
possession.
(2) The time specified in subdivision (b), (c), or (d), whichever
is applicable.
(f) If the disclaimer is not filed within the time provided in
subdivision (b), (c), (d), or (e), the disclaimant has the burden of
establishing that the disclaimer was filed within a reasonable time
after the disclaimant acquired knowledge of the interest.
SEC. 7. Section 2580 of the Probate Code is amended to read:
2580. (a) The conservator or other interested person may file a
petition under this article for an order of the court authorizing or
requiring the conservator to take a proposed action for any one or
more of the following purposes:
(1) Benefiting the conservatee or the estate.
(2) Minimizing current or prospective taxes or expenses of
administration of the conservatorship estate or of the estate upon
the death of the conservatee.
(3) Providing gifts for any purposes, and to any charities,
relatives (including the other spouse or domestic partner), friends,
or other objects of bounty, as would be likely beneficiaries of gifts
from the conservatee.
(b) The action proposed in the petition may include, but is not
limited to, the following:
(1) Making gifts of principal or income, or both, of the estate,
outright or in trust.
(2) Conveying or releasing the conservatee's contingent and
expectant interests in property, including marital property rights
and any right of survivorship incident to joint tenancy or tenancy by
the entirety.
(3) Exercising or releasing the conservatee's powers as donee of a
power of appointment.
(4) Entering into contracts.
(5) Creating for the benefit of the conservatee or others,
revocable or irrevocable trusts of the property of the estate, which
trusts may extend beyond the conservatee's disability or life. A
special needs trust for money paid pursuant to a compromise or
judgment for a conservatee may be established only under Chapter 4
(commencing with Section 3600) of Part 8, and not under this article.
(6) Transferring to a trust created by the conservator or
conservatee any property unintentionally omitted from the trust.
(7) Exercising options of the conservatee to purchase or exchange
securities or other property.
(8) Exercising the rights of the conservatee to elect benefit or
payment options, to terminate, to change beneficiaries or ownership,
to assign rights, to borrow, or to receive cash value in return for a
surrender of rights under any of the following:
(A) Life insurance policies, plans, or benefits.
(B) Annuity policies, plans, or benefits.
(C) Mutual fund and other dividend investment plans.
(D) Retirement, profit sharing, and employee welfare plans and
benefits.
(9) Exercising the right of the conservatee to elect to take under
or against a will.
(10) Exercising the right of the conservatee to disclaim any
interest that may be disclaimed under Part 8 (commencing with Section
260) of Division 2.
(11) Exercising the right of the conservatee (A) to revoke or
modify a revocable trust or (B) to surrender the right to revoke or
modify a revocable trust, but the court shall not authorize or
require the conservator to exercise the right to revoke or modify a
revocable trust if the instrument governing the trust (A) evidences
an intent to reserve the right of revocation or modification
exclusively to the conservatee, (B) provides expressly that a
conservator may not revoke or modify the trust, or (C) otherwise
evidences an intent that would be inconsistent with authorizing or
requiring the conservator to exercise the right to revoke or modify
the trust.
(12) Making an election referred to in Section 13502 or an
election and agreement referred to in Section 13503.
(13) Making a will.
(14) Making or revoking a revocable transfer on death deed.
SEC. 8. Section 5000 of the Probate Code is amended to read:
5000. (a) A provision for a nonprobate transfer on death in an
insurance policy, contract of employment, bond, mortgage, promissory
note, certificated or uncertificated security, account agreement,
custodial agreement, deposit agreement, compensation plan, pension
plan, individual retirement plan, employee benefit plan, trust,
conveyance, deed of gift, revocable transfer on death deed, marital
property agreement, or other written instrument of a similar nature
is not invalid because the instrument does not comply with the
requirements for execution of a will, and this code does not
invalidate the instrument.
(b) Included within subdivision (a) are the following:
(1) A written provision that moneys or other benefits due to,
controlled by, or owned by a decedent before death shall be paid
after the decedent's death to a person whom the decedent designates
either in the instrument or in a separate writing, including a will,
executed either before or at the same time as the instrument, or
later.
(2) A written provision that moneys due or to become due under the
instrument shall cease to be payable in the event of the death of
the promisee or the promisor before payment or demand.
(3) A written provision that any property controlled by or owned
by the decedent before death that is the subject of the instrument
shall pass to a person whom the decedent designates either in the
instrument or in a separate writing, including a will, executed
either before or at the same time as the instrument, or
later.
(c) Nothing in this section limits the rights of creditors under
any other law.
SEC. 9. Section 5302 of the Probate Code is amended to read:
5302. Subject to Section 5040:
(a) Sums remaining on deposit at the death of a party to a joint
account belong to the surviving party or parties as against the
estate of the decedent unless there is clear and convincing evidence
of a different intent. If there are two or more surviving parties,
their respective ownerships during lifetime are in proportion to
their previous ownership interests under Section 5301 augmented by an
equal share for each survivor of any interest the decedent may have
owned in the account immediately before the decedent's death; and the
right of survivorship continues between the surviving parties.
(b) If the account is a P.O.D. account:
(1) On death of one of two or more parties, the rights to any sums
remaining on deposit are governed by subdivision (a).
(2) On death of the sole party or of the survivor of two or more
parties, (A) any sums remaining on deposit belong to the P.O.D. payee
or payees if surviving, or to the survivor of them if one or more
die before the party, (B) if two or more P.O.D. payees survive, any
sums remaining on deposit belong to them in equal and undivided
shares unless the terms of the account or deposit agreement expressly
provide for different shares, and (C) if two or more P.O.D. payees
survive, there is no right of survivorship in the event of death of a
P.O.D. payee thereafter unless the terms of the account or deposit
agreement expressly provide for survivorship between them.
(c) If the account is a Totten trust account:
(1) On death of one of two or more trustees, the rights to any
sums remaining on deposit are governed by subdivision (a).
(2) On death of the sole trustee or the survivor of two or more
trustees, (A) any sums remaining on deposit belong to the person or
persons named as beneficiaries, if surviving, or to the survivor of
them if one or more die before the trustee, unless there is clear and
convincing evidence of a different intent, (B) if two or more
beneficiaries survive, any sums remaining on deposit belong to them
in equal and undivided shares unless the terms of the account or
deposit agreement expressly provide for different shares, and (C) if
two or more beneficiaries survive, there is no right of survivorship
in event of death of any beneficiary thereafter unless the terms of
the account or deposit agreement expressly provide for survivorship
between them.
(d) In other cases, the death of any party to a multiparty account
has no effect on beneficial ownership of the account other than to
transfer the rights of the decedent as part of the decedent's estate.
(e) A right of survivorship arising from the express terms of the
account or under this section, a beneficiary designation in a Totten
trust account, or a P.O.D. payee designation, cannot be changed by
will.
SEC. 10. The heading of Part 4 (commencing with Section 5600) of
Division 5 of the Probate Code is repealed.
SEC. 11. A heading is added as Chapter 3 (commencing with Section
5040) to Part 1 of Division 5 of the Probate Code, immediately
preceding Section 5040, to read:
CHAPTER 3. NONPROBATE TRANSFER TO FORMER SPOUSE
SEC. 12. Section 5600 of the Probate Code is amended and
renumbered to read:
5040. (a) Except as provided in subdivision (b), a nonprobate
transfer to the transferor's former spouse, in an instrument executed
by the transferor before or during the marriage, fails if, at the
time of the transferor's death, the former spouse is not the
transferor's surviving spouse as defined in Section 78, as a result
of the dissolution or annulment of the marriage. A judgment of legal
separation that does not terminate the status of husband and wife is
not a dissolution for purposes of this section.
(b) Subdivision (a) does not cause a nonprobate transfer to fail
in any of the following cases:
(1) The nonprobate transfer is not subject to revocation by the
transferor at the time of the transferor's death.
(2) There is clear and convincing evidence that the transferor
intended to preserve the nonprobate transfer to the former spouse.
(3) A court order that the nonprobate transfer be maintained on
behalf of the former spouse is in effect at the time of the
transferor's death.
(c) Where a nonprobate transfer fails by operation of this
section, the instrument making the nonprobate transfer shall be
treated as it would if the former spouse failed to survive the
transferor.
(d) Nothing in this section affects the rights of a subsequent
purchaser or encumbrancer for value in good faith who relies on the
apparent failure of a nonprobate transfer under this section or who
lacks knowledge of the failure of a nonprobate transfer under this
section.
(e) As used in this section, "nonprobate transfer" means a
provision, other than a provision of a life insurance policy, of
either of the following types:
(1) A provision of a type described in Section 5000.
(2) A provision in an instrument that operates on death, other
than a will, conferring a power of appointment or naming a trustee.
SEC. 13. Section 5601 of the Probate Code is amended and
renumbered to read:
5042. (a) Except as provided in subdivision (b), a joint tenancy
between the decedent and the decedent's former spouse, created before
or during the marriage, is severed as to the decedent's interest if,
at the time of the decedent's death, the former spouse is not the
decedent's surviving spouse as defined in Section 78, as a result of
the dissolution or annulment of the marriage. A judgment of legal
separation that does not terminate the status of husband and wife is
not a dissolution for purposes of this section.
(b) Subdivision (a) does not sever a joint tenancy in either of
the following cases:
(1) The joint tenancy is not subject to severance by the decedent
at the time of the decedent's death.
(2) There is clear and convincing evidence that the decedent
intended to preserve the joint tenancy in favor of the former spouse.
(c) Nothing in this section affects the rights of a subsequent
purchaser or encumbrancer for value in good faith who relies on an
apparent severance under this section or who lacks knowledge of a
severance under this section.
(d) For purposes of this section, property held in "joint tenancy"
includes property held as community property with right of
survivorship, as described in Section 682.1 of the Civil Code.
SEC. 14. Section 5602 of the Probate Code is amended and
renumbered to read:
5044. (a) Nothing in this chapter affects the rights of a
purchaser or encumbrancer of real property for value who in good
faith relies on an affidavit or a declaration under penalty of
perjury under the laws of this state that states all of the
following:
(1) The name of the decedent.
(2) The date and place of the decedent's death.
(3) A description of the real property transferred to the affiant
or declarant by an instrument making a nonprobate transfer or by
operation of joint tenancy survivorship.
(4) Either of the following, as appropriate:
(A) The affiant or declarant is the surviving spouse of the
decedent.
(B) The affiant or declarant is not the surviving spouse of the
decedent, but the rights of the affiant or declarant to the described
property are not affected by Section 5040 or 5042.
(b) A person relying on an affidavit or declaration made pursuant
to subdivision (a) has no duty to inquire into the truth of the
matters stated in the affidavit or declaration.
(c) An affidavit or declaration made pursuant to subdivision (a)
may be recorded.
SEC. 15. Section 5603 of the Probate Code is amended and
renumbered to read:
5046. Nothing in this chapter is intended to limit the court's
authority to order a party to a dissolution or annulment of marriage
to maintain the former spouse as a beneficiary on any nonprobate
transfer described in this chapter, or to preserve a joint tenancy in
favor of the former spouse.
SEC. 16. Section 5604 of the Probate Code is amended and
renumbered to read:
5048. (a) This chapter, formerly Part 4 (commencing with Section
5600), is operative on January 1, 2002.
(b) Except as provided in subdivision (c), this chapter applies to
an instrument making a nonprobate transfer or creating a joint
tenancy whether executed before, on, or after the operative date of
this chapter.
(c) Sections 5040 and 5042 do not apply, and the applicable law in
effect before the operative date of this chapter applies, to an
instrument making a nonprobate transfer or creating a joint tenancy
in either of the following circumstances:
(1) The person making the nonprobate transfer or creating the
joint tenancy dies before the operative date of this chapter.
(2) The dissolution of marriage or other event that terminates the
status of the nonprobate transfer beneficiary or joint tenant as a
surviving spouse occurs before the operative date of this chapter.
SEC. 17. Part 4 (commencing with Section 5600) is added to
Division 5 of the Probate Code, to read:
PART 4. REVOCABLE TRANSFER ON DEATH DEED
CHAPTER 1. GENERAL PROVISIONS
Article 1. Preliminary Provisions
5600. (a) This part applies to a revocable transfer on death deed
made by a transferor who dies on or after January 1, 2016, whether
the deed was executed or recorded before, on, or after January 1,
2016.
(b) Nothing in this part invalidates an otherwise valid transfer
under Section 5602.
(c) This part shall remain in effect only until January 1, 2021,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2021, deletes or extends that date. The
repeal of this part pursuant to this subdivision shall not affect
the validity or effect of a revocable transfer on death deed that is
executed before January 1, 2021, and shall not affect the authority
of the transferor to revoke a transfer on death deed by recording a
signed and notarized instrument that is substantially in the form
specified in Section 5644.
5602. This part does not preclude use of any other method of
conveying real property that is permitted by law and that has the
effect of postponing enjoyment of the property until the death of the
owner.
5604. (a) Except as provided in subdivision (b), nothing in this
part affects the application to a revocable transfer on death deed of
any other statute governing a nonprobate transfer on death,
including, but not limited to, any of the following provisions that
by its terms or intent would apply to a nonprobate transfer on death:
(1) Division 2 (commencing with Section 100).
(2) Part 1 (commencing with Section 5000) of this division.
(3) Division 10 (commencing with Section 20100).
(4) Division 11 (commencing with Section 21101).
(b) Notwithstanding subdivision (a), a provision of another
statute governing a nonprobate transfer on death does not apply to a
revocable transfer on death deed to the extent this part provides a
contrary rule.
Article 2. Definitions
5606. Unless the provision or context otherwise requires, the
definitions in this article govern the construction of this part.
5608. "Beneficiary" means a person named in a revocable transfer
on death deed as transferee of the property.
5610. "Real property" means any of the following:
(a) Real property improved with not less than one nor more than
four residential dwelling units.
(b) A condominium unit, including the limited common elements
allocated to the exclusive use thereof that form an integral part of
the condominium unit.
(c) A single tract of agricultural real estate consisting of 40
acres or less that is improved with a single-family residence.
5612. "Recorded" has the meaning provided in Section 1170 of the
Civil Code.
5614. (a) "Revocable transfer on death deed" means an instrument
created pursuant to this part that does all of the following:
(1) Makes a donative transfer of real property to a named
beneficiary.
(2) Operates on the transferor's death.
(3) Remains revocable until the transferor's death.
(b) A revocable transfer on death deed may also be known as a
"revocable TOD deed."
5616. "Transferor" means an owner of real property who makes a
revocable transfer on death deed of the property.
CHAPTER 2. EXECUTION AND REVOCATION
Article 1. Execution
5620. An owner of real property who has the capacity to contract
may make a revocable transfer on death deed of the property.
5622. The transferor shall identify the beneficiary by name in a
revocable transfer on death deed.
5624. A revocable transfer on death deed is not effective unless
the transferor signs and dates the deed and acknowledges the deed
before a notary public.
5626. (a) A revocable transfer on death deed is not effective
unless the deed is recorded on or before 60 days after the date it
was executed.
(b) The transferor is not required to deliver a revocable transfer
on death deed to the beneficiary during the transferor's life.
(c) The beneficiary is not required to accept a revocable transfer
on death deed from the transferor during the transferor's life.
5628. (a) If a revocable transfer on death deed is recorded for
the same property for which another revocable transfer on death deed
is recorded, the later executed deed is the operative instrument and
its recordation revokes the earlier executed deed.
(b) Revocation of a revocable transfer on death deed does not
revive an instrument earlier revoked by recordation of that deed.
Article 2. Revocation
5630. A transferor who has the capacity to contract may revoke a
revocable transfer on death deed at any time.
5632. (a) An instrument revoking a revocable transfer on death
deed shall be executed and recorded before the transferor's death in
the same manner as execution and recordation of a revocable transfer
on death deed.
(b) Joinder, consent, or agreement of, or notice to, the
beneficiary is not required for revocation of a revocable transfer on
death deed.
Article 3. Statutory Forms
5642. A revocable transfer on death deed shall be substantially
in the following form.
(a) The first page of the form shall be substantially the
following:
SIMPLE REVOCABLE TRANSFER ON DEATH (TOD) DEED
(California Probate Code Section 5642)
Recording Requested By:
When Recorded Mail This Deed To
Name:
Address:
Assessor's Parcel Number: Space Above For
Recorder's Use
This document is exempt from documentary transfer
tax under Rev. & Tax. Code a7 11930. This document
is exempt from preliminary change of ownership
report under Rev. & Tax. Code a7 480.3.
IMPORTANT NOTICE: THIS DEED MUST BE RECORDED ON
OR BEFORE 60 DAYS AFTER THE DATE IT IS SIGNED AND
NOTARIZED
Use this deed to transfer the property
Use this deed to transfer the residential
property described below directly to your named
beneficiaries when you die. YOU SHOULD CAREFULLY
READ ALL OF THE INFORMATION ON THE OTHER SID
PAG E S OF
THIS FORM. You may wish to consult an attorney
before using this deed. It may have results that
you do not want. Provide only the information
asked for in the form. DO NOT INSERT ANY OTHER
INFORMATION OR INSTRUCTIONS. This form MUST be
RECORDED on or before 60 days after the date it
is signed and notarized or it will not be
effective.
PROPERTY DESCRIPTION
Print the legal description of the property
Print the legal description of the residential
property affected by this deed:
__________________________________________________
BENEFICIARY(IES)
Print the FULL NAME(S) of the person(s) who will
receive the property on your death (DO NOT use
general terms like ""my children'') and state the
RELATIONSHIP that each named person has to you
(spouse, son, daughter, friend, etc.):
__________________________________________________
__________________________________________________
__________________________________________________
TRANSFER ON DEATH
I transfer all of my interest in the described
property to the named beneficiary(ies) on my
death. I may revoke this deed. When recorded,
this deed revokes any TOD deed that I made before
signing this deed.
Sign and print your name below (your name should
exactly match the name shown on your title
documents):
_______________________________ Date _____________
NOTE: This deed only transfers MY ownership share
of the property. The deed does NOT transfer the
share of any co-owner of the property. Any co-
owner who wants to name a TOD beneficiary must
execute and RECORD a SEPARATE deed.
ACKNOWLEDGMENT OF NOTARY
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the
truthfulness, accuracy, or validity of that
document.
State of California )
County of _____________________ )
On ___________________________ before me, (here
insert name and title of the officer), personally
appeared ___________________________, who proved
to me on the basis of satisfactory evidence to be
the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their
authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws
of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature ___________________________ (Seal)
(b) Subsequent pages of a form executed under this section shall
be in substantially the following form:
COMMON QUESTIONS ABOUT THE USE OF THIS FORM
WHAT DOES THE TOD DEED DO? When you die, the
identified property will transfer to your named
beneficiary without probate. The TOD deed has
no effect until you die. You can revoke it at
any time.
CAN I USE THIS DEED TO TRANSFER BUSINESS
PROPERTY? This deed can only be used to
transfer (1) a parcel of property that contains
one to four residential dwelling units, (2) a
condominium unit, or (3) a parcel of
agricultural land of 40 acres or less, which
contains a single-family residence.
HOW DO I USE THE TOD DEED? Complete this form.
Have it notarized. RECORD the form in the
county where the property is located. The form
MUST be recorded on or before 60 days after the
date you sign it or the deed has no effect.
IS THE ""LEGAL DESCRIPTION'' OF THE PROPERTY
NECESSARY? Yes.
HOW DO I FIND THE ""LEGAL DESCRIPTION''
OF THE PROPERTY? This information may be on the
deed you received when you became an owner of
the property. This information may also be
available in the office of the county recorder
for the county where the property is located.
If you are not absolutely sure, consult an
attorney.
HOW DO I ""RECORD'' THE FORM? Take the
completed and notarized form to the county
recorder for the county in which the property
is located. Follow the instructions given by
the county recorder to make the form part of
the official property records.
WHAT IF I SHARE OWNERSHIP OF THE PROPERTY? This
form only transfers YOUR share of the property.
If a co-owner also wants to name a TOD
beneficiary, that co-owner must complete and
RECORD a separate form.
CAN I REVOKE THE TOD DEED IF I CHANGE
MY MIND? Yes. You may revoke the TOD deed at
any time. No one, including your beneficiary,
can prevent you from revoking the deed.
HOW DO I REVOKE THE TOD DEED? There are three
ways to revoke a recorded TOD deed: (1)
Complete, have notarized, and RECORD a
revocation form. (2) Create, have notarized,
and RECORD a new TOD deed. (3) Sell or give
away the property, or transfer it to a trust,
before your death and RECORD the deed. A TOD
deed can only affect property that you own when
you die. A TOD deed cannot be revoked by will.
CAN I REVOKE A TOD DEED BY CREATING A NEW
DOCUMENT THAT DISPOSES OF THE PROPERTY (FOR
EXAMPLE, BY CREATING A NEW TOD DEED OR BY
ASSIGNING THE PROPERTY TO A TRUST)? Yes, but
only if the new document is RECORDED. To avoid
any doubt, you may wish to RECORD a TOD deed
revocation form before creating the new
instrument. A TOD deed cannot be
revoked by will, or by purporting to leave the
subject property to anyone via will.
IF I SELL OR GIVE AWAY THE PROPERTY DESCRIBED
IN A TOD DEED, WHAT HAPPENS WHEN I DIE? If the
deed or other document used to transfer your
property is RECORDED before your death, the TOD
deed will have no effect. If the transfer
document is not RECORDED before your death, the
TOD deed will take effect.
I AM BEING PRESSURED TO COMPLETE THIS FORM.
WHAT SHOULD I DO? Do NOT complete this form
unless you freely choose to do so. If you are
being pressured to dispose of your property in
a way that you do not want, you may want to
alert a family member, friend, the district
attorney, or a senior service agency.
DO I NEED TO TELL MY BENEFICIARY ABOUT THE TOD
DEED? No. But secrecy can cause later
complications and might make it easier for
others to commit fraud.
WHAT DOES MY BENEFICIARY NEED TO DO WHEN I DIE?
Your beneficiary must RECORD evidence of your
death (Prob. Code a7 210), and file a change in
ownership notice (Rev. & Tax. Code a7 480). If
you received Medi-Cal benefits, your
beneficiary must notify the State Department of
Health Care Services of your death and provide
a copy of your death certificate (Prob. Code a7
215).
WHAT IF I NAME MORE THAN ONE BENEFICIARY? Your
beneficiaries will become co-owners in equal
shares as tenants in common. If you want a
different result, you should not use this form.
HOW DO I NAME BENEFICIARIES? You MUST name your
beneficiaries individually, using each
beneficiary's FULL name. You MAY NOT use
general terms to describe
beneficiaries, such as ""my children.'' For
each beneficiary that you name, you should
briefly state that person's relationship to you
(for example, my spouse, my son, my daughter,
my friend, etc.).
WHAT IF A BENEFICIARY DIES BEFORE I DO? If all
beneficiaries die before you, the TOD deed has
no effect. If a beneficiary dies before you,
but other beneficiaries survive you, the share
of the deceased beneficiary will be divided
equally between the surviving beneficiaries. If
that is not the result you want, you should not
use the TOD deed.
WHAT IS THE EFFECT OF A TOD DEED ON PROPERTY
THAT I OWN AS JOINT TENANCY OR COMMUNITY
PROPERTY WITH RIGHT OF SURVIVORSHIP? If you are
the first joint tenant or spouse to die, the
deed is VOID and has no effect. The property
transfers to your joint tenant or surviving
spouse and not according to this deed. If
you are the last joint tenant or spouse to die,
the deed takes effect and controls the
ownership of your property when you die. If you
do not want these results, do not use this
form. The deed does NOT transfer the share of a
co-owner of the property. Any co-owner who
wants to name a TOD beneficiary must complete
and RECORD a SEPARATE deed.
CAN I ADD OTHER CONDITIONS ON THE FORM? No. If
you do, your beneficiary may need to go to
court to clear title.
IS PROPERTY TRANSFERRED BY THE TOD DEED SUBJECT
TO MY DEBTS? Yes.
DOES THE TOD DEED HELP ME TO AVOID GIFT AND
ESTATE TAXES? No.
HOW DOES THE TOD DEED AFFECT PROPERTY TAXES?
The TOD deed has no effect on your property
taxes until your death. At that time, property
tax law applies as it would to any
other change of ownership.
DOES THE TOD DEED AFFECT MY ELIGIBILITY FOR
MEDI-CAL? No.
AFTER MY DEATH, WILL MY HOME BE LIABLE FOR
REIMBURSEMENT OF THE STATE FOR MEDI-CAL
EXPENDITURES? Your home may be liable for
reimbursement. If you have questions, you
should consult an attorney.
5644. A transferor may revoke a revocable transfer on death deed
by an instrument in substantially the following form:
Revocation of
Revocable Transfer on Death (TOD) Deed
(California Probate Code Section 5600)
Recording Requested By:
When Recorded Mail This Deed To
Name:
Address:
Assessor's Parcel Number: Space Above For
Recorder's Use
This deed revocation is exempt from documentary
transfer tax under Rev. & Tax. Code a711930. This
deed revocation is exempt from preliminary change
of ownership report under Rev. & Tax. Code a7
480.3.
IMPORTANT NOTICE: THIS FORM MUST BE
RECORDED TO BE EFFECTIVE
This revocation form MUST be RECORDED before
your death or it will not be effective. This
revocation form only affects a transfer on death
deed that YOU made. A transfer on death deed
made by a co-owner of your property is not
affected by this revocation form. A co-owner who
wants to revoke a transfer on death deed that
he/she made must complete and RECORD a SEPARATE
revocation form.
PROPERTY DESCRIPTION
Print the legal description of the property
affected by this revocation:
_________________________________________________
REVOCATION
I revoke any TOD deed to transfer the described
property that I executed before executing this
form.
SIGNATURE AND DATE
Sign and print your name below (your name should
exactly match the name shown on your title
documents):
_________________________ Date __________________
ACKNOWLEDGMENT OF NOTARY
A notary public or other officer completing this
certificate verifies only the identity of the
individual who signed the document to which this
certificate is attached, and not the
truthfulness, accuracy, or validity of that
document.
State of California )
County of _______________ )
On ___________________________ before me, (here
insert name and title of the officer),
personally appeared ___________________________,
who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed
the instrument.
I certify under PENALTY OF PERJURY under the
laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature ___________________________
(Seal)
CHAPTER 3. EFFECT
Article 1. General Provisions
5650. During the transferor's life, execution and recordation of
a revocable transfer on death deed:
(a) Does not affect the ownership rights of the transferor, and
the transferor or the transferor's agent or other fiduciary may
convey, assign, contract, encumber, or otherwise deal with the
property, and the property is subject to process of the transferor's
creditors, as if no revocable transfer on death deed were executed or
recorded.
(b) Does not create any legal or equitable right in the
beneficiary, and the property is not subject to process of the
beneficiary's creditors.
(c) Does not transfer or convey any right, title, or interest in
the property.
5652. (a) A revocable transfer on death deed transfers all of the
transferor's interest in the property on the transferor's death
according to the following rules:
(1) Subject to the beneficiary's right to disclaim the transfer,
the interest in the property is transferred to the beneficiary in
accordance with the deed.
(2) The interest of a beneficiary is contingent on the beneficiary
surviving the transferor. Notwithstanding Section 21110, the
interest of a beneficiary that fails to survive the transferor
lapses.
(3) Except as provided in paragraph (4), if there is more than one
beneficiary, they take the property as tenants in common, in equal
shares.
(4) If there is more than one beneficiary, the share of a
beneficiary that lapses or fails for any reason is transferred to the
others in equal shares.
(b) Property is transferred by a revocable transfer on death deed
subject to any limitation on the transferor's interest that is of
record at the transferor's death, including, but not limited to, a
lien, encumbrance, easement, lease, or other instrument affecting the
transferor's interest, whether recorded before or after recordation
of the revocable transfer on death deed. The holder of rights under
that instrument may enforce those rights against the property
notwithstanding its transfer by the revocable transfer on death deed.
(c) A revocable transfer on death deed transfers the property
without covenant or warranty of title.
5654. (a) For the purpose of determination of eligibility for
health care under Chapter 7 (commencing with Section 14000) or
Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of
the Welfare and Institutions Code, execution and recordation of a
revocable transfer on death deed is not a lifetime transfer of the
property.
(b) Property transferred by a revocable transfer on death deed is
subject to claims of the State Department of Health Care Services to
the extent authorized by law.
5656. For the purpose of application of the property taxation and
documentary transfer tax provisions of the Revenue and Taxation
Code:
(a) Execution and recordation of, or revocation of, a revocable
transfer on death deed of real property is not a change in ownership
of the property and does not require declaration or payment of a
documentary transfer tax or filing of a preliminary change of
ownership report.
(b) Transfer of real property on the death of the transferor by a
revocable transfer on death deed is a change in ownership of the
property.
Article 2. Other Instruments and Forms of Tenure
5660. If a revocable transfer on death deed recorded on or before
60 days after the date it was executed and another instrument both
purport to dispose of the same property:
(a) If the other instrument is not recorded before the transferor'
s death, the revocable transfer on death deed is the operative
instrument.
(b) If the other instrument is recorded before the transferor's
death and makes a revocable disposition of the property, the later
executed of the revocable transfer on death deed or the other
instrument is the operative instrument.
(c) If the other instrument is recorded before the transferor's
death and makes an irrevocable disposition of the property, the other
instrument and not the revocable transfer on death deed is the
operative instrument.
5664. If, at the time of the transferor's death, title to the
property described in the revocable transfer on death deed is held in
joint tenancy or as community property with right of survivorship,
the revocable transfer on death deed is void. The transferor's
interest in the property is governed by the right of survivorship and
not by the revocable transfer on death deed.
5666. (a) Chapter 2 (commencing with Section 5010) of Part 1
applies to a revocable transfer on death deed of community property.
(b) For the purpose of application of Chapter 2 (commencing with
Section 5010) of Part 1 to a revocable transfer on death deed of
community property, written consent to the deed, revocation of
written consent to the deed, or modification of the deed, is
ineffective unless recorded within the time required by that chapter
for execution or service of the written consent, revocation, or
modification.
5668. A revocable transfer on death deed of community property
with right of survivorship is subject to Section 5666, relating to a
revocable transfer on death deed of community property.
Article 3. Creditors
5670. Notwithstanding any other statute governing priorities
among creditors, a creditor of the transferor whose right is
evidenced at the time of the transferor's death by an encumbrance or
lien of record on property transferred by a revocable transfer on
death deed has priority against the property over a creditor of the
beneficiary, regardless of whether the beneficiary's obligation was
created before or after the transferor's death and regardless of
whether the obligation is secured or unsecured, voluntary or
involuntary, recorded or unrecorded.
5672. Each beneficiary is personally liable to the extent
provided in Section 5674 for the unsecured debts of the transferor.
Any such debt may be enforced against the beneficiary in the same
manner as it could have been enforced against the transferor if the
transferor had not died. In any action based on the debt, the
beneficiary may assert any defense, cross-complaint, or setoff that
would have been available to the transferor if the transferor had not
died. Nothing in this section permits enforcement of a claim that is
barred under Part 4 (commencing with Section 9000) of Division 7.
Section 366.2 of the Code of Civil Procedure applies in an action
under this section.
5674. (a) A beneficiary is not liable under Section 5672 if
proceedings for the administration of the transferor's estate are
commenced and the beneficiary satisfies the requirements of Section
5676.
(b) The aggregate of the personal liability of a beneficiary under
Section 5672 shall not exceed the sum of the following:
(1) The fair market value at the time of the transferor's death of
the property received by the beneficiary pursuant to the revocable
transfer on death deed, less the amount of any liens and encumbrances
on the property at that time.
(2) The net income the beneficiary received from the property.
(3) If the property has been disposed of, interest on the fair
market value of the property from the date of disposition at the rate
payable on a money judgment. For the purposes of this paragraph,
"fair market value of the property" has the same meaning as defined
in paragraph (2) of subdivision (a) of Section 5676.
5676. (a) Subject to subdivisions (b), (c), and (d), if
proceedings for the administration of the transferor's estate are
commenced, each beneficiary is liable for:
(1) The restitution to the transferor's estate of the property the
beneficiary received pursuant to the revocable transfer on death
deed if the beneficiary still has the property, together with (A) the
net income the beneficiary received from the property and (B) if the
beneficiary encumbered the property after the transferor's death,
the amount necessary to satisfy the balance of the encumbrance as of
the date the property is restored to the estate.
(2) The restitution to the transferor's estate of the fair market
value of the property if the beneficiary no longer has the property,
together with (A) the net income the beneficiary received from the
property prior to disposing of it and (B) interest from the date of
disposition at the rate payable on a money judgment on the fair
market value of the property. For the purposes of this paragraph, the
"fair market value of the property" is the fair market value,
determined as of the time of the disposition of the property, of the
property the beneficiary received pursuant to the revocable transfer
on death deed, less the amount of any liens and encumbrances on the
property at the time of the transferor's death.
(b) Subject to subdivision (c), if proceedings for the
administration of the transferor's estate are commenced and a
beneficiary made a significant improvement to the property received
by the beneficiary pursuant to the revocable transfer on death deed,
the beneficiary is liable for whichever of the following the
transferor's estate elects:
(1) The restitution of the property, as improved, to the estate of
the transferor upon the condition that the estate reimburse the
beneficiary for (A) the amount by which the improvement increases the
fair market value of the property restored, determined as of the
time of restitution, and (B) the amount paid by the beneficiary for
principal and interest on any liens or encumbrances that were on the
property at the time of the transferor's death.
(2) The restoration to the transferor's estate of the fair market
value of the property, determined as of the time of the transferor's
death, less the amount of any liens and encumbrances on the property
at that time, together with interest on the net amount at the rate
payable on a money judgment running from the time of the transferor's
death.
(c) The property and amount required to be restored to the estate
under this section shall be reduced by any property or amount paid by
the beneficiary to satisfy a liability under Section 5672.
(d) An action to enforce the liability under this section may be
brought only by the personal representative of the estate of the
transferor. Whether or not the personal representative brings an
action under this section, the personal representative may enforce
the liability only to the extent of the beneficiary's liability under
Section 5672. The reasonable cost of proceeding under this section
shall be reimbursed as an extraordinary service under Sections 10801
and 10811. Action under this section is optional. A personal
representative is never required to act under this section.
(e) An action to enforce the liability under this section is
forever barred three years after the transferor's death. The
three-year period specified in this subdivision is not tolled for any
reason. Nothing in this subdivision affects the requirements of
Section 215, any law that may toll the limitations period for the
commencement of a Medi-Cal estate recovery action, or the time for
commencement of an action by the State Department of Health Care
Services under Section 14009.5 of the Welfare and Institutions Code.
(f) If property is restored to the transferor's estate under this
section, that property shall be treated as a specific gift and any
proceeds remaining from the sale of the property after the payment of
claims shall be returned to the beneficiary.
CHAPTER 4. EFFECTUATION OF TRANSFER
5680. (a) The beneficiary may establish the fact of the
transferor's death under the procedure provided in Chapter 2
(commencing with Section 210) of Part 4 of Division 2. For the
purpose of this subdivision, the beneficiary is a person empowered by
statute to act on behalf of the transferor or the transferor's
estate within the meaning of Section 103526 of the Health and Safety
Code.
(b) For the purpose of filing the change in ownership statement
required by Section 480 of the Revenue and Taxation Code, the
beneficiary is a transferee of real property by reason of death.
(c) For the purpose of giving the notice to the Director of Health
Care Services provided for in Section 215, the beneficiary is a
beneficiary of the transferor.
(d) The beneficiary is liable to the transferor's estate for
prorated estate and generation-skipping transfer taxes to the extent
provided in Division 10 (commencing with Section 20100).
5682. If both of the following conditions are satisfied, a person
dealing with a beneficiary of a revocable transfer on death deed of
real property shall have the same rights and protections as the
person would have if the beneficiary had been named as a distributee
of the property in an order for distribution of the transferor's
estate that had become final:
(a) The person acted in good faith and for a valuable
consideration.
(b) An affidavit of death was recorded for the property under
Chapter 2 (commencing with Section 210) of Part 4 of Division 2.
CHAPTER 5. CONTEST
5690. (a) (1) An action for the disqualification of a beneficiary
under Part 3.7 (commencing with Section 21360) of Division 11 may be
brought to contest the validity of a transfer of property by a
revocable transfer on death deed.
(2) An action to contest the validity of a transfer of property by
a revocable transfer on death deed may be filed by the transferor's
personal representative or an interested person under Part 19
(commencing with Section 850) of Division 2.
(b) The proper county for a contest proceeding is the proper
county for proceedings concerning administration of the transferor's
estate, whether or not proceedings concerning administration of the
transferor's estate have been commenced at the time of the contest.
(c) On commencement of a contest proceeding, the contestant may
record a lis pendens in the county in which the revocable transfer on
death deed is recorded.
5692. (a) A contest proceeding pursuant to Section 5690 shall not
be commenced before the transferor's death.
(b) For the purposes of the applicable limitations period, a
contest proceeding accrues on the date of the transferor's death.
5694. If the court in a contest proceeding determines that a
transfer of property by a revocable transfer on death deed is
invalid, the court shall order the following relief:
(a) If the proceeding was commenced and a lis pendens was recorded
within 120 days after the transferor's death, the court shall void
the deed and order transfer of the property to the person entitled to
it.
(b) If the proceeding was not commenced and a lis pendens was not
recorded within 120 days after the transferor's death, the court
shall grant appropriate relief but the court order shall not affect
the rights in the property of a purchaser or encumbrancer for value
and in good faith acquired before commencement of the proceeding and
recordation of a lis pendens.
5696. (a) Nothing in this chapter limits the application of
principles of fraud, undue influence, duress, mistake, or other
invalidating cause to a transfer of property by a revocable transfer
on death deed.
(b) Notwithstanding subdivision (a) of Section 5692, the
conservator or guardian of a transferor may, before the transferor's
death, petition the court for invalidation of a revocable transfer on
death deed executed by the transferor.
SEC. 18. Section 13111 of the Probate Code is amended to read:
13111. (a) Subject to the provisions of this section, if
proceedings for the administration of the decedent's estate are
commenced in this state, or if the decedent's personal representative
has consented to the payment, transfer, or delivery of the decedent'
s property under this chapter and the personal representative later
requests that the property be restored to the estate, each person to
whom payment, delivery, or transfer of the decedent's property is
made under this chapter is liable for:
(1) The restitution of the property to the estate if the person
still has the property, together with (A) the net income the person
received from the property and (B) if the person encumbered the
property after it was delivered or transferred to the person, the
amount necessary to satisfy the balance of the encumbrance as of the
date the property is restored to the estate.
(2) The restitution to the estate of the fair market value of the
property if the person no longer has the property, together with (A)
the net income the person received from the property and (B) interest
on the fair market value of the property from the date of
disposition at the rate payable on a money judgment. For the purposes
of this subdivision, the "fair market value of the property" is the
fair market value, determined as of the time of the disposition of
the property, of the property paid, delivered, or transferred to the
person under this chapter, less any liens and encumbrances on the
property at that time.
(b) Subject to subdivision (c) and subject to any additional
liability the person has under Sections 13109 to 13112, inclusive, if
the person fraudulently secured the payment, delivery, or transfer
of the decedent's property under this chapter, the person is liable
under this section for restitution to the decedent's estate of three
times the fair market value of the property. For the purposes of this
subdivision, the "fair market value of the property" is the fair
market value, determined as of the time the person liable under this
subdivision presents the affidavit or declaration under this chapter,
of the property paid, delivered, or transferred to the person under
this chapter, less the amount of any liens and encumbrances on the
property at that time.
(c) The property and amount required to be restored to the estate
under this section shall be reduced by any property or amount paid by
the person to satisfy a liability under Section 13109 or 13110.
(d) An action to enforce the liability under this section may be
brought only by the personal representative of the estate of the
decedent. Whether or not the personal representative brings an action
under this section, the personal representative may enforce the
liability only to the extent necessary to protect the interests of
the heirs, devisees, and creditors of the decedent.
(e) An action to enforce the liability under this section is
forever barred three years after presentation of the affidavit or
declaration under this chapter to the holder of the decedent's
property, or three years after the discovery of the fraud, whichever
is later. The three-year period specified in this subdivision is not
tolled for any reason.
(f) In the case of a nondomiciliary decedent, restitution under
this section shall be made to the estate in an ancillary
administration proceeding.
SEC. 19. Section 13206 of the Probate Code is amended to read:
13206. (a) Subject to subdivisions (b), (c), (d), and (e), if
proceedings for the administration of the decedent's estate are
commenced, or if the decedent's personal representative has consented
to use of the procedure provided by this chapter and the personal
representative later requests that the property be restored to the
estate, each person who is designated as a successor of the decedent
in a certified copy of an affidavit issued under Section 13202 is
liable for:
(1) The restitution to the decedent's estate of the property the
person took under the certified copy of the affidavit if the person
still has the property, together with (A) the net income the person
received from the property and (B) if the person encumbered the
property after the certified copy of the affidavit was issued, the
amount necessary to satisfy the balance of the encumbrance as of the
date the property is restored to the estate.
(2) The restitution to the decedent's estate of the fair market
value of the property if the person no longer has the property,
together with (A) the net income the person received from the
property prior to disposing of it and (B) interest from the date of
disposition at the rate payable on a money judgment on the fair
market value of the property. For the purposes of this paragraph, the
"fair market value of the property" is the fair market value,
determined as of the time of the disposition of the property, of the
property the person took under the certified copy of the affidavit,
less the amount of any liens and encumbrances on the property at the
time the certified copy of the affidavit was issued.
(b) Subject to subdivision (d), if the person fraudulently
executed or filed the affidavit under this chapter, the person is
liable under this section for restitution to the decedent's estate of
three times the fair market value of the property. For the purposes
of this subdivision, the "fair market value of the property" is the
fair market value, determined as of the time the certified copy of
the affidavit was issued, of the property the person took under the
certified copy of the affidavit, less the amount of any liens and
encumbrances on the property at that time.
(c) Subject to subdivision (d), if proceedings for the
administration of the decedent's estate are commenced and a person
designated as a successor of the decedent in a certified copy of an
affidavit issued under Section 13202 made a significant improvement
to the property taken by the person under the certified copy of the
affidavit in the good faith belief that the person was the successor
of the decedent to that property, the person is liable for whichever
of the following the decedent's estate elects:
(1) The restitution of the property, as improved, to the estate of
the decedent upon the condition that the estate reimburse the person
making restitution for (A) the amount by which the improvement
increases the fair market value of the property restored, determined
as of the time of restitution, and (B) the amount paid by the person
for principal and interest on any liens or encumbrances that were on
the property at the time the certified copy of the affidavit was
issued.
(2) The restoration to the decedent's estate of the fair market
value of the property, determined as of the time of the issuance of
the certified copy of the affidavit under Section 13202, less the
amount of any liens and encumbrances on the property at that time,
together with interest on the net amount at the rate payable on a
money judgment running from the date of the issuance of the certified
copy of the affidavit.
(d) The property and amount required to be restored to the estate
under this section shall be reduced by any property or amount paid by
the person to satisfy a liability under Section 13204 or 13205.
(e) An action to enforce the liability under this section may be
brought only by the personal representative of the estate of the
decedent. Whether or not the personal representative brings an action
under this section, the personal representative may enforce the
liability only to the extent necessary to protect the interests of
the heirs, devisees, and creditors of the decedent.
(f) An action to enforce the liability under this section is
forever barred three years after the certified copy of the affidavit
is issued under Section 13202, or three years after the discovery of
the fraud, whichever is later. The three-year period specified in
this subdivision is not tolled for any reason.
SEC. 20. Section 13562 of the Probate Code is amended to read:
13562. (a) Subject to subdivisions (b), (c), and (d), if
proceedings for the administration of the decedent's estate are
commenced, the surviving spouse is liable for:
(1) The restitution to the decedent's estate of the decedent's
property if the surviving spouse still has the decedent's property,
together with (A) the net income the surviving spouse received from
the decedent's property and (B) if the surviving spouse encumbered
the decedent's property after the date of death, the amount necessary
to satisfy the balance of the encumbrance as of the date the
decedent's property is restored to the estate.
(2) The restitution to the decedent's estate of the fair market
value of the decedent's property if the surviving spouse no longer
has the decedent's property, together with (A) the net income the
surviving spouse received from the decedent's property prior to
disposing of it and (B) interest from the date of disposition at the
rate payable on a money judgment on the fair market value of the
decedent's property. For the purposes of this paragraph, the "fair
market value of the decedent's property" is the fair market value of
the decedent's property, determined as of the time of the disposition
of the decedent's property, less the amount of any liens and
encumbrances on the decedent's property at the time of the decedent's
death.
(b) Subject to subdivision (c), if proceedings for the
administration of the decedent's estate are commenced and the
surviving spouse made a significant improvement to the decedent's
property in the good faith belief that the surviving spouse was the
successor of the decedent to the decedent's property, the surviving
spouse is liable for whichever of the following the decedent's estate
elects:
(1) The restitution of the decedent's property, as improved, to
the estate of the decedent upon the condition that the estate
reimburse the surviving spouse for (A) the amount by which the
improvement increases the fair market value of the decedent's
property restored, valued as of the time of restitution, and (B) the
amount paid by the surviving spouse for principal and interest on any
liens or encumbrances that were on the decedent's property at the
time of the decedent's death.
(2) The restoration to the decedent's estate of the fair market
value of the decedent's property, valued as of the time of the
decedent's death, excluding the amount of any liens and encumbrances
on the decedent's property at that time, together with interest on
the net amount at the rate payable on a money judgment running from
the date of the decedent's death.
(c) The property and amount required to be restored to the estate
under this section shall be reduced by any property or amount paid by
the surviving spouse to satisfy a liability under Chapter 3
(commencing with Section 13550).
(d) An action to enforce the liability under this section may be
brought only by the personal representative of the estate of the
decedent. Whether or not the personal representative brings an action
under this section, the
personal representative may enforce the liability only to the extent
necessary to protect the interests of the heirs, devisees, and
creditors of the decedent.
(e) An action to enforce the liability under this section is
forever barred three years after the death of the decedent. The
three-year period specified in this subdivision is not tolled for any
reason.
SEC. 21. (a) The California Law Revision Commission shall study
the effect of California's revocable transfer on death deed set forth
in Part 4 (commencing with Section 5600) of Division 5 of the
Probate Code and make recommendations in this regard. The commission
shall report all of its findings to the Legislature on or before
January 1, 2020.
(b) In the study required by subdivision (a), the commission shall
address all of the following:
(1) Whether the revocable transfer on death deed is working
effectively.
(2) Whether the revocable transfer on death deed should be
continued.
(3) Whether the revocable transfer on death deed is subject to
misuse or misunderstanding.
(4) What changes should be made to the revocable transfer on death
deed or the law associated with the deed to improve its
effectiveness and to avoid misuse or misunderstanding.
(5) Whether the revocable transfer on death deed has been used to
perpetuate financial abuse on property owners and, if so, how the law
associated with the deed should be changed to minimize this abuse.
(c) (1) The report required by subdivision (a) shall comply with
Section 9795 of the Government Code.
(2) Pursuant to Section 10231.5 of the Government Code, this
section is repealed on January 1, 2024.