Bill Text: IA SF2117 | 2015-2016 | 86th General Assembly | Introduced
Bill Title: A bill for an act relating to creation of transfer on death deeds and to disclaimers of an interest in real property, and including applicability provisions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2016-02-09 - Subcommittee, Horn, Kinney, and Whitver. S.J. 191. [SF2117 Detail]
Download: Iowa-2015-SF2117-Introduced.html
Senate File 2117 - Introduced SENATE FILE BY RAGAN A BILL FOR 1 An Act relating to creation of transfer on death deeds and to 2 disclaimers of an interest in real property, and including 3 applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: TLSB 5560XS (8) 86 jh/rj PAG LIN 1 1 Section 1. NEW SECTION. 633F.1 Short title. 1 2 This chapter may be cited as the "Uniform Real Property 1 3 Transfer on Death Act". 1 4 Sec. 2. NEW SECTION. 633F.2 Definitions. 1 5 As used in this chapter, unless the context otherwise 1 6 requires: 1 7 1. "Beneficiary" means a person that receives property under 1 8 a transfer on death deed. 1 9 2. "Designated beneficiary" means a person designated to 1 10 receive property in a transfer on death deed. 1 11 3. "Joint owner" means an individual who owns property 1 12 concurrently with one or more other individuals with a right of 1 13 survivorship. "Joint owner" includes a joint tenant and tenant 1 14 by the entirety. "Joint owner" does not include a tenant in 1 15 common. 1 16 4. "Person" means an individual, corporation, business 1 17 trust, estate, trust, partnership, limited liability company, 1 18 association, joint venture, public corporation, government or 1 19 governmental subdivision, agency, or instrumentality, or any 1 20 other legal or commercial entity. 1 21 5. "Property" means an interest in real property located in 1 22 this state which is transferable on the death of the owner. 1 23 6. "Transfer on death deed" means a deed authorized under 1 24 this chapter. 1 25 7. "Transferor" means an individual who makes a transfer on 1 26 death deed. 1 27 Sec. 3. NEW SECTION. 633F.3 Applicability. 1 28 This chapter applies to a transfer on death deed made before, 1 29 on, or after the effective date of this Act by a transferor 1 30 dying on or after the effective date of this Act. 1 31 Sec. 4. NEW SECTION. 633F.4 Nonexclusivity. 1 32 This chapter does not affect any method of transferring 1 33 property otherwise permitted under the law of this state. 1 34 Sec. 5. NEW SECTION. 633F.5 Transfer on death deed 1 35 authorized. 2 1 An individual may transfer property to one or more 2 2 beneficiaries effective at the transferor's death by a transfer 2 3 on death deed. 2 4 Sec. 6. NEW SECTION. 633F.6 Transfer on death deed 2 5 revocable. 2 6 A transfer on death deed is revocable even if the deed or 2 7 another instrument contains a contrary provision. 2 8 Sec. 7. NEW SECTION. 633F.7 Transfer on death deed 2 9 nontestamentary. 2 10 A transfer on death deed is nontestamentary. 2 11 Sec. 8. NEW SECTION. 633F.8 Capacity of transferor. 2 12 The capacity required to make or revoke a transfer on death 2 13 deed is the same as the capacity required to make a will. 2 14 Sec. 9. NEW SECTION. 633F.9 Requirements. 2 15 A transfer on death deed: 2 16 1. Except as otherwise provided in subsection 2, must 2 17 contain the essential elements and formalities of a properly 2 18 recordable inter vivos deed. 2 19 2. Must state that the transfer to the designated 2 20 beneficiary is to occur at the transferor's death. 2 21 3. Must be recorded before the transferor's death in the 2 22 public records in the office of the county recorder in the 2 23 county where the property is located. 2 24 Sec. 10. NEW SECTION. 633F.10 Notice, delivery, acceptance, 2 25 consideration not required. 2 26 A transfer on death deed is effective without any of the 2 27 following: 2 28 1. Notice or delivery to or acceptance by the designated 2 29 beneficiary during the transferor's life. 2 30 2. Consideration. 2 31 Sec. 11. NEW SECTION. 633F.11 Revocation by instrument 2 32 authorized ==== revocation by act not permitted. 2 33 1. Subject to subsection 2, an instrument is effective to 2 34 revoke a recorded transfer on death deed, or any part of the 2 35 deed, only if all of the following apply: 3 1 a. The instrument is any of the following: 3 2 (1) A transfer on death deed that revokes the deed or part 3 3 of the deed expressly or by inconsistency. 3 4 (2) An instrument of revocation that expressly revokes the 3 5 deed or part of the deed. 3 6 (3) An inter vivos deed that expressly revokes the transfer 3 7 on death deed or part of the deed. 3 8 b. The instrument is acknowledged by the transferor after 3 9 the acknowledgment of the deed being revoked and is recorded 3 10 before the transferor's death in the public records in the 3 11 office of the county recorder of the county where the deed is 3 12 recorded. 3 13 2. If a transfer on death deed is made by more than one 3 14 transferor, all of the following apply: 3 15 a. Revocation by a transferor does not affect the deed as to 3 16 the interest of another transferor. 3 17 b. A deed of joint owners is revoked only if the deed is 3 18 revoked by all of the living joint owners. 3 19 3. After a transfer on death deed is recorded, the deed 3 20 cannot be revoked by a revocatory act on the deed. 3 21 4. This section does not limit the effect of an inter vivos 3 22 transfer of the property. 3 23 Sec. 12. NEW SECTION. 633F.12 Effect of transfer on death 3 24 deed during transferor's life. 3 25 During a transferor's life, a transfer on death deed does not 3 26 do any of the following: 3 27 1. Affect an interest or right of the transferor or any 3 28 other owner, including the right to transfer or encumber the 3 29 property. 3 30 2. Affect an interest or right of a transferee, even if the 3 31 transferee has actual or constructive notice of the deed. 3 32 3. Affect an interest or right of a secured or unsecured 3 33 creditor or future creditor of the transferor, even if the 3 34 creditor has actual or constructive notice of the deed. 3 35 4. Affect the transferor's or designated beneficiary's 4 1 eligibility for any form of public assistance. 4 2 5. Create a legal or equitable interest in favor of the 4 3 designated beneficiary. 4 4 6. Subject the property to claims or process of a creditor 4 5 of the designated beneficiary. 4 6 Sec. 13. NEW SECTION. 633F.13 Effect of transfer on death 4 7 deed at transferor's death. 4 8 1. Except as otherwise provided in the transfer on death 4 9 deed, in this section, or in section 633.238, 633.523, or 4 10 633.535, upon the death of the transferor, the following rules 4 11 apply to property that is the subject of a transfer on death 4 12 deed and owned by the transferor at death: 4 13 a. Subject to paragraph "b", the interest in the property is 4 14 transferred to the designated beneficiary in accordance with 4 15 the deed. 4 16 b. The interest of a designated beneficiary is contingent 4 17 on the designated beneficiary surviving the transferor. The 4 18 interest of a designated beneficiary that fails to survive the 4 19 transferor lapses. 4 20 c. Subject to paragraph "d", concurrent interests are 4 21 transferred to the beneficiaries in equal and undivided shares 4 22 with no right of survivorship. 4 23 d. If the transferor has identified two or more designated 4 24 beneficiaries to receive concurrent interests in the property, 4 25 the share of one which lapses or fails for any reason is 4 26 transferred to the other, or to the others in proportion to the 4 27 interest of each in the remaining part of the property held 4 28 concurrently. 4 29 2. Subject to section 558.41, a beneficiary takes the 4 30 property subject to all conveyances, encumbrances, assignments, 4 31 contracts, mortgages, liens, and other interests to which the 4 32 property is subject at the transferor's death. For purposes 4 33 of this subsection and section 558.41, the recording of the 4 34 transfer on death deed is deemed to have occurred at the 4 35 transferor's death. 5 1 3. a. If a transferor is a joint owner and is survived 5 2 by one or more other joint owners, the property that is the 5 3 subject of a transfer on death deed belongs to the surviving 5 4 joint owner or owners with right of survivorship. 5 5 b. If a transferor is the last surviving joint owner, the 5 6 transfer on death deed is effective. 5 7 4. A transfer on death deed transfers property without 5 8 covenant or warranty of title even if the deed contains a 5 9 contrary provision. 5 10 Sec. 14. NEW SECTION. 633F.14 Disclaimer. 5 11 A beneficiary may disclaim all or part of the beneficiary's 5 12 interest as provided by chapter 633E. 5 13 Sec. 15. NEW SECTION. 633F.15 Liability for creditor claims 5 14 and statutory allowances. 5 15 1. To the extent the transferor's probate estate is 5 16 insufficient to satisfy an allowed claim against the estate 5 17 or a statutory allowance to a surviving spouse or child, the 5 18 estate may enforce the liability against property transferred 5 19 at the transferor's death by a transfer on death deed. 5 20 2. If more than one property is transferred by one or more 5 21 transfer on death deeds, the liability under subsection 1 is 5 22 apportioned among the properties in proportion to the net 5 23 values of the properties at the transferor's death. 5 24 3. A proceeding to enforce the liability under this section 5 25 must be commenced not later than eighteen months after the 5 26 transferor's death. 5 27 Sec. 16. NEW SECTION. 633F.16 Optional form of transfer 5 28 on death deed. 5 29 The following form may be used to create a transfer on death 5 30 deed. The other sections of this chapter govern the effect of 5 31 this or any other instrument used to create a transfer on death 5 32 deed: 5 33 (front of form) 5 34 REVOCABLE TRANSFER ON DEATH DEED 5 35 NOTICE TO OWNER 6 1 You should carefully read all information on the other side 6 2 of this form. You May Want to Consult a Lawyer Before Using 6 3 This Form. 6 4 This form must be recorded before your death, or it will not 6 5 be effective. 6 6 IDENTIFYING INFORMATION 6 7 Owner or Owners Making This Deed: 6 8 _____________________________ _________________________ 6 9 Printed name Mailing address 6 10 _____________________________ _________________________ 6 11 Printed name Mailing address 6 12 Legal description of the property: 6 13 __________________________________________________________ 6 14 PRIMARY BENEFICIARY 6 15 I designate the following beneficiary if the beneficiary 6 16 survives me. 6 17 _____________________________ _________________________ 6 18 Printed name Mailing address, if available 6 19 ALTERNATE BENEFICIARY = Optional 6 20 If my primary beneficiary does not survive me, I designate 6 21 the following alternate beneficiary if that beneficiary 6 22 survives me. 6 23 _____________________________ _________________________ 6 24 Printed name Mailing address, if available 6 25 TRANSFER ON DEATH 6 26 At my death, I transfer my interest in the described property 6 27 to the beneficiaries as designated above. 6 28 Before my death, I have the right to revoke this deed. 6 29 SIGNATURE OF OWNER OR OWNERS MAKING THIS DEED 6 30 Seal, if any 6 31 Signature Date 6 32 _____________________________ _________________________ 6 33 Seal, if any 6 34 Signature Date 6 35 _____________________________ _________________________ 7 1 ACKNOWLEDGMENT 7 2 (insert acknowledgment for deed here) 7 3 (back of form) 7 4 COMMON QUESTIONS ABOUT THE USE OF THIS FORM 7 5 What does the Transfer on Death (TOD) deed do? 7 6 When you die, this deed transfers the described property, 7 7 subject to any liens or mortgages (or other encumbrances) on 7 8 the property at your death. Probate is not required. The TOD 7 9 deed has no effect until you die. You can revoke it at any 7 10 time. You are also free to transfer the property to someone 7 11 else during your lifetime. If you do not own any interest in 7 12 the property when you die, this deed will have no effect. 7 13 How do I make a TOD deed? 7 14 Complete this form. Have it acknowledged before a 7 15 notary public or other individual authorized by law to take 7 16 acknowledgments. Record the form in each county where any part 7 17 of the property is located. The form has no effect unless it is 7 18 acknowledged and recorded before your death. 7 19 Is the legal description of the property necessary? 7 20 Yes. 7 21 How do I find the legal description of the property? 7 22 This information may be on the deed you received when you 7 23 became an owner of the property. This information may also be 7 24 available in the office of the county recorder for the county 7 25 where the property is located. If you are not absolutely sure, 7 26 consult a lawyer. 7 27 Can I change my mind before I record the TOD deed? 7 28 Yes. If you have not yet recorded the deed and want to 7 29 change your mind, simply tear up or otherwise destroy the deed. 7 30 How do I record the TOD deed? 7 31 Take the completed and acknowledged form to the office 7 32 of the county recorder of the county where the property is 7 33 located. Follow the instructions given by the county recorder 7 34 to make the form part of the official property records. If the 7 35 property is in more than one county, you should record the deed 8 1 in each county. 8 2 Can I later revoke the TOD deed if I change my mind? 8 3 Yes. You can revoke the TOD deed. No one, including the 8 4 beneficiaries, can prevent you from revoking the deed. 8 5 How do I revoke the TOD deed after it is recorded? 8 6 There are three ways to revoke a recorded TOD deed: [1] 8 7 Complete and acknowledge a revocation form, and record it in 8 8 each county where the property is located. [2] Complete and 8 9 acknowledge a new TOD deed that disposes of the same property, 8 10 and record it in each county where the property is located. 8 11 [3] Transfer the property to someone else during your lifetime 8 12 by a recorded deed that expressly revokes the TOD deed. You 8 13 may not revoke the TOD deed by will. 8 14 I am being pressured to complete this form. What should I 8 15 do? 8 16 Do not complete this form under pressure. Seek help from a 8 17 trusted family member, friend, or lawyer. 8 18 Do I need to tell the beneficiaries about the TOD deed? 8 19 No, but it is recommended. Secrecy can cause later 8 20 complications and might make it easier for others to commit 8 21 fraud. 8 22 I have other questions about this form. What should I do? 8 23 This form is designed to fit some but not all situations. 8 24 If you have other questions, you are encouraged to consult a 8 25 lawyer. 8 26 Sec. 17. NEW SECTION. 633F.17 Optional form of revocation. 8 27 The following form may be used to create an instrument of 8 28 revocation under this chapter. The other sections of this 8 29 chapter govern the effect of this or any other instrument used 8 30 to revoke a transfer on death deed. 8 31 (front of form) 8 32 REVOCATION OF TRANSFER ON DEATH DEED 8 33 NOTICE TO OWNER 8 34 This revocation must be recorded before you die or it will 8 35 not be effective. This revocation is effective only as to the 9 1 interests in the property of owners who sign this revocation. 9 2 IDENTIFYING INFORMATION 9 3 Owner or Owners of Property Making This Revocation: 9 4 _____________________________ _________________________ 9 5 Printed name Mailing address 9 6 _____________________________ _________________________ 9 7 Printed name Mailing address 9 8 Legal description of the property: 9 9 __________________________________________________________ 9 10 REVOCATION 9 11 I revoke all my previous transfers of this property by 9 12 transfer on death deed. 9 13 SIGNATURE OF OWNER OR OWNERS MAKING THIS REVOCATION 9 14 Seal, if any 9 15 Signature Date 9 16 _____________________________ _________________________ 9 17 Seal, if any 9 18 Signature Date 9 19 _____________________________ _________________________ 9 20 ACKNOWLEDGMENT 9 21 (insert acknowledgment here) 9 22 (back of form) 9 23 COMMON QUESTIONS ABOUT THE USE OF THIS FORM 9 24 How do I use this form to revoke a Transfer on Death (TOD) 9 25 deed? 9 26 Complete this form. Have it acknowledged before a notary 9 27 public or other individual authorized to take acknowledgments. 9 28 Record the form in the public records in the office of the 9 29 county recorder of each county where the property is located. 9 30 The form must be acknowledged and recorded before your death or 9 31 it has no effect. 9 32 How do I find the legal description of the property? 9 33 This information may be on the TOD deed. It may also be 9 34 available in the office of the county recorder for the county 9 35 where the property is located. If you are not absolutely sure, 10 1 consult a lawyer. 10 2 How do I record the form? 10 3 Take the completed and acknowledged form to the office 10 4 of the county recorder of the county where the property is 10 5 located. Follow the instructions given by the county recorder 10 6 to make the form part of the official property records. If the 10 7 property is located in more than one county, you should record 10 8 the form in each of those counties. 10 9 I am being pressured to complete this form. What should I 10 10 do? 10 11 Do not complete this form under pressure. Seek help from a 10 12 trusted family member, friend, or lawyer. 10 13 I have other questions about this form. What should I do? 10 14 This form is designed to fit some but not all situations. If 10 15 you have other questions, consult a lawyer. 10 16 Sec. 18. NEW SECTION. 633F.18 Uniformity of application 10 17 and construction. 10 18 In applying and construing this uniform Act, consideration 10 19 shall be given to the need to promote uniformity of the law 10 20 with respect to the subject matter of this chapter among the 10 21 states that enact it. 10 22 Sec. 19. NEW SECTION. 633F.19 Relation to Electronic 10 23 Signatures in Global and National Commerce Act. 10 24 This chapter modifies, limits, and supersedes the federal 10 25 Electronic Signatures in Global and National Commerce Act, 15 10 26 U.S.C. {7001, et seq., but does not modify, limit, or supersede 10 27 section 101(c) of that Act, 15 U.S.C. {7001(c), or authorize 10 28 electronic delivery of any of the notices described in section 10 29 103(b) of that Act, 15 U.S.C. {7003(b). 10 30 Sec. 20. Section 331.602, Code 2016, is amended by adding 10 31 the following new subsection: 10 32 NEW SUBSECTION. 33. Record a transfer on death deed created 10 33 pursuant to section 633F.5 or an instrument of revocation 10 34 authorized by section 633F.11 and presented to the recorder's 10 35 office for recording in the same manner as other deeds are 11 1 recorded. The recorder shall collect a fee under section 11 2 331.604 for the recording of the transfer on death deed or 11 3 instrument of revocation and shall index the transfer on death 11 4 deed or instrument of revocation in the name of the owner of 11 5 record of the real property or interest in the real property 11 6 who executed the transfer on death deed. 11 7 Sec. 21. Section 633E.12, subsections 6 and 7, Code 2016, 11 8 are amended to read as follows: 11 9 6. In the case ofa disclaimer ofan interest created by 11 10 a beneficiary designationmadewhich is disclaimed beforethe 11 11 timethe designation becomes irrevocable, the disclaimer must 11 12 be delivered to the person making the beneficiary designation. 11 13 7. In the case ofa disclaimer ofan interest created by 11 14 a beneficiary designationmadewhich is disclaimed afterthe 11 15 timethe designation becomes irrevocable, the disclaimer of an 11 16 interest in personal property must be delivered to the person 11 17 obligated to distribute the interest and the disclaimer of an 11 18 interest in real property must be recorded in the office of the 11 19 county recorder of the county where the real property that is 11 20 the subject of the disclaimer is located. 11 21 EXPLANATION 11 22 The inclusion of this explanation does not constitute agreement with 11 23 the explanation's substance by the members of the general assembly. 11 24 This bill provides that an individual may execute a transfer 11 25 on death deed which transfers real property outside of probate 11 26 to one or more beneficiaries effective at the transferor's 11 27 death. 11 28 To be valid, a transfer on death deed must contain the 11 29 essential elements and formalities of a properly recordable 11 30 inter vivos deed, state that the transfer to the designated 11 31 beneficiary is to occur at the transferor's death, and be 11 32 recorded before the transferor's death in the office of the 11 33 county recorder. 11 34 A transfer on death deed is revocable, even if the deed 11 35 states that the deed is irrevocable. A transferor may revoke 12 1 a transfer on death deed by acknowledging and recording an 12 2 inconsistent transfer on death deed, or an instrument of 12 3 revocation or inter vivos deed that expressly revokes the deed. 12 4 A transfer on death dead is nontestamentary, and the 12 5 capacity required to make or revoke a transfer on death deed is 12 6 the same capacity required to make a will. 12 7 A transfer on death deed is effective even if the beneficiary 12 8 does not receive notice or delivery of the deed during the 12 9 transferor's lifetime, and even if the transferor does not 12 10 receive consideration for the deed. 12 11 During the transferor's lifetime, a transfer on death deed 12 12 does not affect the transferor's interest in the property, 12 13 including the right to transfer or encumber the property, nor 12 14 does the transfer on death deed create a legal or equitable 12 15 interest in favor of the designated beneficiary or subject the 12 16 property to claims of a creditor of the designated beneficiary. 12 17 If the transferor transfers the property that is the subject 12 18 of a transfer of death deed before the transferor's death, the 12 19 transfer on death deed is of no effect at the death of the 12 20 transferor. 12 21 At the death of the transferor, subject to Code sections 12 22 633.238 (elective share of surviving spouse), 633.523 through 12 23 633.538 (uniform simultaneous death act), and 633.535 through 12 24 633.537 (felonious death), the property is transferred to the 12 25 designated beneficiary if the designated beneficiary is alive. 12 26 If the designated beneficiary predeceases the transferor, the 12 27 interest of the designated beneficiary lapses. 12 28 Subject to Code section 558.41 (recording), a beneficiary 12 29 who takes property under a transfer on death deed takes the 12 30 property subject to all conveyances, encumbrances, assignments, 12 31 contracts, mortgages, liens, and other interests to which the 12 32 property is subject at the transferor's death. 12 33 If the transferor owns the property as a joint tenant or as 12 34 a tenant by the entirety, the transfer on death deed is only 12 35 effective if the transferor is the last surviving joint tenant 13 1 or tenant by the entirety. 13 2 A beneficiary may disclaim all or part of the beneficiary's 13 3 interest as provided by Code chapter 633E (uniform disclaimer 13 4 of property interest Act). 13 5 To the extent that the transferor's probate estate is 13 6 insufficient to satisfy an allowed claim against the estate 13 7 or a statutory allowance to a surviving spouse or child, the 13 8 estate may enforce the liability against property transferred 13 9 at the transferor's death by a transfer on death deed. 13 10 The bill provides an optional form of a transfer on death 13 11 deed and an optional form for the revocation of a transfer on 13 12 death deed. 13 13 The bill does not affect any deed executed and recorded prior 13 14 to the effective date of the bill and applies to a transfer on 13 15 death deed made before, on, or after the effective date of the 13 16 bill by a transferor dying on or after the effective date of 13 17 the bill. 13 18 The bill makes conforming changes. LSB 5560XS (8) 86 jh/rj
