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News & Press: Sacramento Report

Transfer on Death Deed Called into Question

Tuesday, August 15, 2017  
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California enacted legislation in 2015 to permit a revocable transfer on death deed (RTODD) with a “sunset” provision, which will cause the repeal of the law on January 1, 2021. The sunset provision could be repealed or extended before then, but in the meantime the California Law Revision Commission is required to conduct a follow-up study of how the law is working and make recommendations. The Commission decided to postpone most of the work on that study until 2018 or 2019, to provide time for the accumulation of practical experience under the new statute. However, as a first step, the staff sent inquiries to affected groups, asking them to collect information about their experiences under the new law. The CLTA will be responding to the Commission’s inquiries.

In the meantime in response to the request, the Commission received a letter from the Executive Committee of the Trusts and Estates Section of the State Bar (“TEXCOM”) suggesting that the law is so fundamentally flawed that the Commission should consider just allowing the law to expire. The Commission’s staff believes that immediate action is not required, but instead, the issues should be examined when the Commission begins the main bulk of the work in this study in either 2018 or 2019.

However, TEXCOM’s letter raised a related matter that the Commission staff is recommending be examined right away. That issue concerns the liability of a beneficiary for a decedent’s unsecured debts. The Commission staff noted that because those provisions were taken from existing law, to the extent that imperfections exist in the TODD creditor liability provisions, it seems that those same imperfections would exist in the largely identical provisions that were the basis for the RTODD provisions.

California Land Title Association

1215 K Street #1816 Sacramento, CA 95814-3905
Email:  |  Phone: 916-444-2647  |   Fax: 916-444-2851