New Simple Deed Can Save Seniors Money

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Lillian is typical of many seniors who are concerned about leaving their home to a son or daughter when they die.  Lillian knows that probate court in California is expensive, but she can’t afford to spend a couple thousand dollars to have an attorney create a Living Trust.  She has considered deeding the property to her daughter who looks after her, but she prefers not to do that while she is living.  This is not an uncommon dilemma for seniors who have up until now had only two choices, either put their home in a Living Trust or in their Will knowing that the property will need to go through probate before it can be transferred to the heirs.

Beginning this year, seniors have another option thanks to Assembly Bill 139 which was signed into law by Governor Brown.  The new law adds a Revocable Transfer on Death Deed (RTDD) to the Probate Code.  The advantage of the new deed is that it is a simple, low-cost method of conveying real property upon the death of the transferor without giving a present interest. And, it is much less expensive than a Living Trust and it avoids the cost of probate court.

This is well-suited to the needs of seniors whose estate consists primarily of the family home.  There are a few rules regarding when it can be used. For example, it can only be used for residential 1-4 units, a condominium or a farm of 40 acres or less improved with a single family home.  If more than one beneficiary is named in the deed, the beneficiaries will be co-owners in equal shares.  If a more complex plan is needed, a Living Trust would be a better solution.  If the homeowner changes his or her mind, the RTDD can be revoked by signing, dating, and recording a new deed or document at a later time.

Anyone who is contemplating using the RTDD should consult with their attorney to be sure that it is best for them, and to make sure that other documents such as a health care directive is also prepared.  If you have more questions, email me for copy of the deed.  The back side of the form has frequently asked questions and answers that you will find very helpful.