Gov. Jerry Brown has signed a bill to simplify the way Californians pass homes down to their kids, unmarried partner, friend, or loved one before they die. The law, which takes effect Jan. 1, 2016, will allow residential real property to be transferred upon death with a simple form. California state Assemblyman Mike Gatto, D-Glendale, who created AB139, says the new legislation will help middle-class Californians avoid costly legal fees and unintended burdens for intended heirs. Currently, Californians who want to transfer a bank account, stock account or car of any value upon death to an heir can fill out a “Payable on Death” form. Houses have been an exception. Homeowners have been faced with two options, until now. Hire an estate-planning attorney to draft a living trust, which can cost $2,000 to $6,000. Pass the baton to survivors, subjecting them to the probate process. In California, the average estate takes seven to nine months to get through probate, and can cost $26,000 in fees, according to Gatto and online sites on the probate process.
Under the new law, homeowners will be able to fill out a “Revocable Transfer on Death Deed” to transfer interests in up to four homes or condominiums after death without probate administration. Agricultural land of 40 acres or less, which has a single-family home on it, will also be eligible. The deed must be recorded, but can be revoked any time — with no consent needed from the intended beneficiary. Although AARP and Howard Jarvis Taxpayers Association supports the new law, some are reserving judgment. The California Judges Association and the California State Bar trusts and estates section have given indication the bill lacks clarity and could be subjected to misuse, financial abuse or misunderstanding, according to a legislative analysis on AB139. Heeding those concerns, AB139 directs the California Law Revision Committee to study the effects of the new deed process and report its findings by Jan. 1, 2020. Lawmakers will be asked to continue the law, or let it sunset on Jan. 1, 2021.
My own parents were very worried about this whole situation so they created a living trust. It is good that the local government is getting involved. People who lose loved ones have so many things to worry about and that is in addition to the fact that they just lost someone important in their lives. The pain of dealing with that is compounded by the fact that they have to make funeral arrangements and figure out what to do with all of the belongings left behind. Real estate is a tricky business and attorneys can be very expensive. Probate is a huge headache as well because most buyers stay away from these types of sales.
In conclusion, thanks for thinking of those who are already in a stressful situation. With all of the negative things posted about governments and their officials, it is great to have something positive to blog about.