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Earlier versions of the bill, in previous years, were routinely approved by the California Assembly but, just as routinely, defeated in the Senate Judiciary Committee. This year that committee had a new Chair. And, this year, the committee approved the bill unanimously. In fact, no one voted against the bill in either house of the California Legislature. And the Governor signed the bill into law. It becomes effective January 1, 2016.
So what does the bill do, why is it important, and how does it help LGBT people?
What It Does – AB 139 creates a simple form which a homeowner can use to name someone who will get ownership of the home on the death of the home owner. The form is called a Revocable Transfer On Death Deed (RTOD). The beneficiary named on the form will become owner of the home immediately after the death f the original owner. The home being transferred does not need to go through Probate before the beneficiary gains ownership of it.
Why It Is Important – The author of the bill was primarily trying to help unmarried seniors (usually a man and woman) who each have limited income. Often they live together (without marrying) because two can live cheaper than one. Often the homeowner wants his or her companion to get the home if the owner dies first.
He or she could write a will giving the home to the companion on the death of the owner. However, paying a lawyer to write the will can be expensive. Also, any property passed on with a will must go through the court probate process. That is usually very costly. If the two friends are on limited income they might not be able to afford it. Also, probate often takes several years to complete. An elderly beneficiary might be dead before probate is finished..
They could marry, but if the home owner failed to go to the bother and expense of writing a will, and the original home owner had children, living parents, or other relatives, those relatives have a legal right to part of the estate. The surviving spouse, as the result of California’s law of intestate succession, could be entitled to as little as one third of the estate left by the spouse who died. If the deceased home owner had few to no assets, other than the home, it might be necessary to sell the home so that the other relatives their share of the inheritance.
A home owner could simply make his or her friend co-owner of the home. But, if they split up, there is no way to force the companion to give up part ownership of the home. This could result in a nasty and expensive court battle.
There is also the problem of gift taxes. The original owner would be making a gift, equal to half the value of the house, to the companion. Under current US law people can make gifts of up to $14,000 to any individual, tax free. However, the home owner making the gift would have to pay gift taxes on any value over $14,00 given to the companion. That could be expensive.
So, how does AB 139 help same sex couples? – The latest data from the US Census Bureau (from the 2010 census) suggests there are about 594,000 same sex couples in the US. And about $440,000 of them say they are not married.
Many same sex couples, especially older couples, are still reluctant to marry. Can you imagine same sex couples, in small rural town, going to the county clerk’s office and asking for a marriage license. The whole town would know. And that could have frightening consequences.
To be honest, the RTOD would still have to be registered at the county clerk’s office. But saying I want to register this document is probably much less intimidating for a same sex couple than saying we want to apply for a marriage license. And, in fact, only the person signing the RTOD would have to go to the county clerk’s office to register. Only one person showing up at the office is less likely to arouse the curiosity of staff at that office.
AB 139 creates a very useful tool for same sex couples.
I attach a sample of the RTOD form. You should be able to download and print it. Remember, the form will not be usable until January 1, 2016. It should be available on the state’s web site sometime after that date. As of this date, I am not sure just where on the site it will be placed. I will let you know as soon as I know.
To see a sample of the RTOD form click the following link: