SB 507

Nonprobate transfers of real property on death

Under current law, a person may transfer an interest in real property that is

solely owned, owned by spouses as survivorship marital property, or owned by two

or more persons as joint tenants to a designated beneficiary without probate by

designating a beneficiary on a transfer of death (TOD) deed. A beneficiary

designation on a TOD deed does not affect ownership of the interest in real property

until the owner's death.

Under the bill, a person may designate a TOD beneficiary in any document, not

solely in a deed. The bill also provides that the interests in real property that may

be transferred using a TOD document include a fractional interest in real property

owned as tenants in common and an interest in real property owned by a spouse as

marital property without a right of survivorship. Under the bill, a TOD beneficiary

designation is not effective unless the TOD document and any fees required to record

the document are submitted to the register of deeds office of the county in which the

real property is located prior to the death of the owner.

Lastly, the bill creates a statute of limitations for claims to recover real property

transferred to a beneficiary using a TOD document. Under the bill, such a claim is

barred unless, within 120 days after the death of the sole owner or the last to die of

the multiple owners who executed the TOD document, a complaint is filed and a lis

pendens is filed or recorded in each county where any part of the real property is

located.

Transfer by affidavit procedure for small estates

Under current law, an heir, trustee, or person who was a guardian of a decedent

at the time of the decedent's death may use a transfer by affidavit procedure to settle

a decedent's estate if the value of the decedent's property does not exceed $50,000.

This bill specifies that the transfer by affidavit procedure may be utilized only if the

gross value of the decedent's estate does not exceed $50,000. If the transfer by

affidavit procedure is used to transfer an interest in or lien on real property, the bill

requires the person making the affidavit to provide notice to the decedent's heirs at

least 30 days before recording the affidavit in the office of the register of deeds in each

county where the real property is located. Under current law and under the bill, the

recording of the affidavit constitutes the transfer of real property to the affiant under

the transfer by affidavit procedure. Finally, under the bill, if an interest in real

property transferred using the transfer by affidavit procedure is subsequently

acquired by a purchaser or lender in good faith, for value and without actual notice

that the transfer was improper, the purchaser or lender takes title to the real

property free of any claims of the decedent's estate, regardless of whether the

transfer was proper.

Mortgage payoff statements

Under current law, a secured creditor must provide a payoff statement to