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Revocable Transfer on Death Deed: simple in concept, complex in use

The idea of a Revocable Transfer on Death Deed (RTD Deed) is straight-forward: a property owner who wishes to gift real property upon his or her death executes a deed stating that wish. The gift has no effect during the owner's lifetime and he or she may revoke the gift. After the owner's death, the beneficiary can record a deed as the new owner without the costs and complications of a probate or trust administration.

Though they had been available in several other states, RTD Deeds are new to California, created by statute effective January 1, 2016. As with any new statute, there is little or no history of court decisions to rely on for guidance.

The statute provides specific procedures for executing and recording an RTD Deed and a revocation. Already, difficulties are coming to light. For example, the RTD Deed form provided in the statute includes a section "Common Questions About the Use of this Form" following the owner's signature. Apparently, the legislature intended what is essentially a Frequently Asked Questions section to be recorded as part of the RTD Deed. This unusual addition to the deed has caused confusion among property owners, practitioners, and county recorders.

Another feature of the legislation is a sunset provision. The act that created the RTD Deed will be repealed as of January 1, 2021 unless the state legislature and governor act to extend it. An RTD Deed executed after the repeal date will presumably be ineffective.

This blog post only discusses certain select aspects of the California RTD Deed, is not a comprehensive review of California law related to the topic.

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