Avoid Probate, Save Money
In California, to pass the contents of almost any asset – a bank account, a multi-million-dollar stock account, a car of any value – upon death, all an individual needs to do is fill out a simple “Payable On Death” form. However, for most middle-class Californians, there is no easy way to transfer the title for a house. Homeowners currently face two costly options: hire an attorney to draft a trust (which typically costs homeowners between $2,000 and $6,000) or force surviving loved ones to weather the probate process (with an average cost of $26,000).
I am happy to report that Gov. Brown recently signed my legislation to create a “Revocable Transfer on Death Deed,” which will save millions of California households from probate and attorney’s fees. AB 139, which is as the LA Weekly put it, “intelligent and pro-taxpayer,” simplifies the way Californians transfer real-property assets upon death through use of a simple form.
Effective Jan. 1, 2016, for transferring real property upon death this will be the most affordable alternative available to hiring an estate-planning attorney or facing the daunting and bureaucratic probate process. For these reasons, the Howard Jarvis Taxpayers Association said in committee, “Other than Prop. 13, there is no greater bill that we support than AB 139 for this year.”
More than 25 other states allow use of this tool. The measure had been introduced into the California State Legislature four times in the last 10 years, but AB 139 is the first such bill passed by the legislature.
One of the primary roles of the legislature should be to simplify life for Californians. By helping homeowners avoid costly probate fees and unintended burdens on family members, AB 139 will do just that.
Mike Gatto is the chairman of the Privacy and Consumer Protection Committee, and the longest-serving current member of the State Assembly. He represents Burbank, Glendale, La Cañada Flintridge, La Crescenta, Montrose, and the Los Angeles neighborhoods of Atwater Village, East Hollywood, Franklin Hills, Hollywood Hills, Los Feliz, and Silver Lake. Follow him on Twitter @MikeGatto or visit www.asm.ca.gov/gatto.