Bulletin: CA2017003

Dear Associates:

Bulletin CA2016001 regarding Revocable Transfer on Death Deeds, initially dealt with the provisions of the 2016 Act and was then subsequently revised 8-17-22 to also address the changes created under the new 2021 Act. Over the years, we have had the opportunity to address certain underwriting issues, from the creation of the actual Revocable Transfer on Death Deed (TOD Deed) to insuring a sale from the Transferee/Beneficiary of a TOD Deed. The further revisions to this companion bulletin are intended to provide additional underwriting guidelines in connection with the issuance of title insurance following the death of a Transferor under the 2016 Act, as a result of the new 2021 Act.

Establishing the validity and statutory compliance of a TOD Deed under the 2016 Act:

1. Confirm that the TOD Deed was executed prior to January 1, 2022.
2. Confirm that the Transferor was the fee owner of the real property and that the Transferor had not subsequently recorded a document transferring title to the real property.
3. Confirm that the real property is improved with a 1 to 4 family residential dwelling, a condominium unit, or a single tract of agricultural real estate of 40 acres or less and improved with a single-family residence.
4. Confirm that the Transferor had the capacity to contract as you would for any other deed that you are insuring or in the chain of title.
5. Confirm that there are no revocations of the TOD Deed of record, including any multiple or subsequent TOD Deeds of record.
6. Confirm that the property was not held in Joint Tenancy or as Community Property with Right of Survivorship.
7. Confirm that the TOD Deed was recorded within 60 days from the date of execution.
8. Matters concerning the “Common Questions About The Use of This Form”: 
   (a) If the revocable transfer on death deed is executed on or after July 9, 2018, then the recorded deed is not required to include the “Common Questions About The Use of This Form”;
   (b) if the revocable transfer on death deed is executed before July 9, 2018, and the transferor's date of death is after July 9, 2018, then the recorded deed is not required to include the “Common Questions About the Use of This Form”; and 
   (c) if the revocable transfer on death deed is executed before July 9, 2018, and the transferor's date of death is on or before July 8, 2018, then the recorded deed must include (as part of the recorded document) the page titled COMMON QUESTIONS ABOUT THE USE OF THIS FORM. 
9. Treat the TOD Deed as any uninsured deed in the chain of title.

Establishing the death of the Transferor and the transfer to the Transferee under the 2016 Act:

Upon the death of the Transferor,

1. The Transferee must record evidence of the death of the Transferor; this can be accomplished by recording an “Affidavit - Death of Transferor Under Revocable Transfer on Death Deed” (click here).
2. The Transferee must have filed a change in ownership statement pursuant to Revenue and Taxation Code Section 480.
3. Confirm that the Transferor did not receive Medi-Cal benefits at the time of death.
4. Confirm that there is no estate tax presently due and owing, and there will not be any estate tax due and owing in the future.
5. Confirm that there will not be any probate or administration of the Transferor's estate.

Time periods and other important matters associated with the 2016 Act:

1. An action contesting the validity of a TOD Deed may be filed at any time by the Transferor's personal representative or other interested person.
2. You cannot close any transaction before you are able to confirm that there is no proceeding or lis pendens filed or recorded within 120 days after the transferor's death. A lis pendens may be recorded in connection with an action contesting the validity of a TOD Deed. Anyone bringing an action and filing a lis pendens within 120 days after the date of death of the Transferor will protect their rights pending resolution of the action. An action and lis pendens may be brought and filed after 120 days from the date of death of the Transferor, but a purchaser or lender for value and in good faith may have certain protections if their interest was acquired after the 120 days and before commencement of an action and recordation of the lis pendens.
3. To affirm statutory compliance, STG will require an “Affidavit of Beneficiary to Revocable Transfer on Death Deed Signed Before January 1, 2022” (click here) to be completed, signed, and notarized by all Beneficiaries not less than 120 days after the Transferor’s death.

If the TOD Deed was executed on or after January 1, 2022, refer to Bulletin CA2023006 for underwriting guidelines following the death of the Transferor under the 2021 Act.

Pursuant to this bulletin and other related bulletins, the issuance of any title policy in connection with or in reliance upon a TOD Deed or Revocation in the chain of title, must be submitted to an STG underwriter for approval. 

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.