Effectuation Of Transfer - Revocable Transfer On Death Deed - Probate - CA

Section § 5680

This law section explains what roles and responsibilities a beneficiary has when someone passes away and transfers property. First, the beneficiary can establish that the transferor has died using a specific legal procedure. Then, for tax purposes, the beneficiary is considered a new owner of the property due to the transferor's death. Next, the beneficiary must notify the Director of Health Care Services about the transfer as they're considered the official inheritor. Lastly, the beneficiary may be responsible for certain taxes related to the estate, sharing this financial duty with the estate itself.

(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).

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Section § 5681

This section outlines what happens after someone dies if they created a revocable transfer on death deed, which is a way to transfer property without going to probate. After the person who made the deed passes away, the beneficiary (the person receiving the property) must notify the deceased's heirs by sending them a notice, a copy of the deed, and the death certificate.

The notice informs the heirs about the deed and lets them know that they have 120 days to challenge it if they believe it’s invalid. If the beneficiary knows the court-approved list of heirs, they must notify those heirs. If not, they should use reasonable methods to figure out who the heirs are. The beneficiary isn’t required to notify heirs they can't locate or don’t know about.

If there is more than one beneficiary, only one of them has to follow these procedures. If the beneficiary doesn’t notify an heir they’re aware of without trying their best, they could be responsible for any harm caused. However, if they rely on another beneficiary to handle it, they’re not held accountable, and they’re not expected to act like a legal guardian or trustee.

(a) After the death of the transferor, the beneficiary of a revocable transfer on death deed shall serve notice on the transferor’s heirs, along with a copy of the revocable transfer on death deed and a copy of the transferor’s death certificate.

(b) The notice required by subdivision (a) shall be in substantially the following form:

“NOTICE OF REVOCABLE TRANSFER ON DEATH DEED

The enclosed revocable transfer on death deed was created by: [name of deceased transferor].

It affects the following property: [description of property used on revocable transfer on death deed].

It names the following beneficiaries: [beneficiary(ies) named on the revocable transfer on death deed].

As a result of the death of [name of deceased transferor], the deed will transfer the described property to the named beneficiaries, without probate administration.

If you believe that the revocable transfer on death deed is invalid and you wish to stop it from taking effect, you have only 120 days from the date of this notice to file a fully effective challenge. You should act promptly and may wish to consult an attorney.”

(c) For the purposes of this section, if the beneficiary has actual knowledge of a final judicial determination of heirship for the deceased transferor, the beneficiary shall rely on that determination. Otherwise, the beneficiary shall have discretion to make a good faith determination, by any reasonable means, of the heirs of the transferor.

(d) The beneficiary need not provide a copy of the notice to an heir who is either of the following:

(1) Known to the beneficiary but who cannot be located by the beneficiary after reasonable diligence.

(2) Unknown to the beneficiary.

(e) The notice shall be served by any of the methods described in Section 1215 to the last known address.

(f) If a revocable transfer on death deed names more than one beneficiary, only one of the beneficiaries is required to comply with this section.

(g)

(1) A beneficiary who fails to serve the notification required by this section on an heir who is not a beneficiary and whose identity is known to the beneficiary shall be responsible for all damages caused to the heir by the failure, unless the beneficiary shows that they made a reasonably diligent effort to comply. For purposes of this subdivision, “reasonably diligent effort” means that the beneficiary has delivered notice pursuant to Section 1215 to the heir at the heir’s last address actually known to the beneficiary.

(2) A beneficiary is not liable under this subdivision if that beneficiary reasonably relied, in good faith, on another beneficiary’s statement that the other beneficiary would satisfy the requirements of this section.

(3) A beneficiary is not to be held to the same standard as a fiduciary.

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Section § 5682

This law states that if certain conditions are met, someone dealing with a beneficiary of a revocable transfer on death deed has the same rights and protections as if the beneficiary inherited the property through the estate's final distribution.

The conditions are: (a) the person acted honestly and paid for the property; (b) a death affidavit was officially recorded for the property; (c) an affidavit was recorded stating that the beneficiary served the necessary notice as required by law. If multiple beneficiaries exist, only one needs to comply with this notice requirement.

If all 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.

(c)

(1) An affidavit was recorded for the property, which contains a statement in substantially the following form: “I, [name of beneficiary], served the notice required by Probate Code Section 5681.”

(2) If a revocable transfer on death deed names more than one beneficiary, only one beneficiary is required to comply with this subdivision.

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