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Uniform Laws Update—Probate provides information on uniform and model state laws in development as they apply to trust and estate matters. The editors of Probate & Property welcome information and suggestions from readers.
Drafting the 2009 Uniform Real Property Transfer on Death Act
The Uniform Law Commission (ULC) is close to completing its work on the Uniform Real Property Transfer on Death Act. The Drafting Committee finished the latest version of this Act for discussion on March 9, 2009, and final floor consideration is scheduled to commence on Saturday, July 11, at the ULC Annual Meeting in Santa Fe, New Mexico. The Act is being developed in recognition of a major innovation in property law over the past century—the development of asset-specific will substitutes for the transfer of property at death. The benefits of transfer-on-death (TOD) mechanisms are twofold. First, the beneficiaries of these transfers receive the property at the owner's death without waiting for probate. Second, the transferring instruments are not subject to the witnessing requirements of a will. Because of these advantages, nonprobate transfers are widely accepted today.
Currently, TOD instruments are most often used for the transfer of personal property. The most common transfers include the proceeds of life insurance policies and pension plans, securities registered as transfer-on-death, and funds held in pay-on-death bank accounts. Some jurisdictions, however, have also extended the benefits of nonprobate transfers to real property. As of March 2009, 12 states officially recognized real property TOD mechanisms. These existing state laws are fundamentally consistent with section 6-101 of the Uniform Probate Code (UPC), which provides: "A provision for a nonprobate transfer on death in a . . . conveyance, deed of gift . . . or other written instrument of a similar nature is nontestamentary." In keeping with the current movement in state law, the proposed Act seeks to harmonize the existing real property transfer laws and to encourage additional states to recognize real property TOD instruments through enactment and implementation of the new Act.
The drafters of the Act recognized that it must be consistent with the ULC's other uniform laws, in particular the UPC. Because the UPC has been widely adopted in whole or in part in many states, the comments to the new Act clearly point out areas of overlap and explain how the new Act fits in with the UPC. The Act also contains consumer-friendly model forms for a Transfer on Death Deed and a Revocation of Transfer of Death Deed. The Act should be brought to the ABA House of Delegates for approval at its next Midyear Meeting and will be available for consideration by state and territorial legislatures in 2010.
Additional information about the drafting of the Uniform Real Property Transfer on Death Act is available at www.nccusl.org by clicking on "NCCUSL Committees" and then "Drafting Committees." Alternatively, a draft and memos archive is maintained at www.law.upenn.edu/bll/archives/ulc/ulc.htm#tod. The telephone number for the ULC is (312) 450-6600.Return to Probate & Property Magazine