Poor Man’s Trusts Approved in California

Bigstock-Extended-Family-Relaxing-On-So-13907567The San Francisco Chronicle explains in "Californians have a new way to keep homes out of probate," that the new option will be most useful for single people, including widows and widowers. Married people in California don't have to wait; they already have an easy way to avoid probate by holding title to their home or other assets as community property with right of survivorship or joint tenants with right of survivorship. This allows the surviving spouse to inherit the deceased spouse's ownership in the home without it going through probate.

In the past, the only way single people could avoid having their home avoid probate—without adding someone to the title while they were still alive—was by creating a trust. This could be time-consuming and expensive. Starting in 2016, homeowners who want to use the new option will simply sign an instrument called a Simple Revocable Transfer on Death Deed. This will name who will receive the property. They must have it notarized and record it with their county within 60 days but can change their mind and revoke the deed at any time.

This new law expires January 1, 2021 in order to allow time to study its effects. Transfer on death deeds that are executed between now and then would not be impacted, but would still be in effect and could be revoked at any time. However, new ones can't be executed after that date unless the law is extended.

The law requires the California Law Revision Commission to study and make recommendations regarding the new deed to the Legislature by January 1, 2020.

Reference: The San Francisco Chronicle (November 9, 2015) "Californians have a new way to keep homes out of probate"

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