When confronting a complex legal issue it is wise to seek the professional advice of an attorney. Regrettably however some issues have been rendered unnecessarily complex in order to protect the "turf" of the legal community.
This is exactly what happens in California when it comes to designating a beneficiary for your real property. Under current law real estate is passed to heirs through a will trust or by joint tenancy with right of survivorship. Wills have to be probated through Probate Court a costly and time-consuming process that entails both attorney and court fees. Trusts are usually created by an attorney and need to be updated periodically. Both methods are unnecessarily expensive.
There is no need to make the inheritance of real estate so difficult that it becomes a hardship on homeowners especially low income families and seniors.
Assemblyman Don Wagner has introduced a bill AB 699 to cut through the costly red tape and allow homeowners to simply file a Revocable Transfer-on-Death Beneficiary Deed to pass property on to a designated heir. Homeowners would simply file the R-TOD deed on top of their existing deed in the county Recorder’s Office. This deed could be revoked at any time and a new R-TOD deed substituted thus allowing the homeowner to change beneficiary(s) or switch to an entirely different inheritance vehicle. And it can all be done without a lawyer.
Thirteen other states in the US are currently using similar beneficiary deeds. Arizona Arkansas Colorado Indiana Kansas Minnesota Missouri Montana Nevada New Mexico Ohio Oklahoma and Wisconsin all allow homeowners to simply designate a beneficiary for their real estate cutting out the delays and costs that riddle the California inheritance system affecting real property.
Similar bills have been introduced in the Legislature three times before. Each measure was passed by the Assembly but was derailed in the Senate by trust/probate attorneys who are united by their desire to protect their own professional and financial interests.
The duty of our legislators is to work for the best interests of our citizens not to line their pockets by perpetuating a self-serving inheritance system. Real Estate remains the only major asset that cannot be transferred to heirs through a transfer on death title and it is time for reform. People with small estates should not have to hire attorneys and incur big legal bills just to pass a modest house on to their kids. Younger people who stand to inherit the family home would also benefit as they are the ones responsible for paying the legal costs. People with larger estates who prefer to use wills or trusts to pass on more valuable or complex properties can still do so.
Assemblyman Wagner’s bill is now being considered in the Legislature. It is time to free homeowners and their heirs from the "lawyer tax." If the system is to be reformed to benefit average folks instead of self-serving attorneys state Senators need to hear from the public.
Jon Coupal is president of the Howard Jarvis Taxpayers Association. Jennifer Marks is an advocate for seniors.