SF 2196 (LSB 5057XS (3) 84)

SENATE FILE 2196

BY  ZAUN

A BILL FOR

An Act relating to the creation of a transfer on death designation affidavit, and providing penalties, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 331.602, Code 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  Record a transfer on death designation affidavit created pursuant to section 565C.1 and presented to the recorder’s office for recording in the same manner as deeds are recorded. The recorder shall collect a fee for recording the affidavit in the same amount as the fee for recording deeds and shall index the affidavit in the name of the owner of record of the real property or interest in the real property who executed the affidavit.
    Sec. 2.  NEW SECTION.  565C.1  Transfer on death designation affidavit.
   1.
  a.  Any individual who owns real property or any interest in real property as a sole owner, tenant in common, or surviving joint tenant, or together with the individual’s spouse owns an indivisible interest in real property as tenants by the entireties, may designate the entire interest, or any specified part that is less than the entire interest, in such real property as transferable on death to a designated beneficiary or beneficiaries by executing, together with the individual’s spouse, if any, a transfer on death designation affidavit pursuant to this section.
   b.  If the affidavit is executed by an individual together with the individual’s spouse, if any, the dower rights of the spouse are subordinate to the vesting of title to the interest in the real property in the transfer on death beneficiary or beneficiaries designated under this section.
   c.  The affidavit shall be recorded in the office of the county recorder in the county in which the real property is located, and, when recorded, the affidavit or a certified copy of the affidavit shall be evidence of the transfer on death to the beneficiary or beneficiaries so designated in the affidavit insofar as the affidavit affects title to the real property.
   2.
  a.  If an individual who owns real property or an interest in real property as a sole owner or as a tenant in common executes a transfer on death designation affidavit, upon the death of the individual, title to the real property or interest in the real property specified in the affidavit vests in the transfer on death beneficiary or beneficiaries designated in the affidavit.
   b.  If an individual who owns real property or an interest in real property as a surviving joint tenant executes a transfer on death designation affidavit, upon the death of the individual or of one but not all of the surviving joint tenants, title to the real property or interest in the real property specified in the affidavit vests in the surviving joint tenant or tenants. Upon the death of the last surviving joint tenant, title to the real property or interest in the real property vests in the transfer on death beneficiary or beneficiaries designated in the affidavit, subject to section 565C.2.
   c.  If an individual who together with the individual’s spouse owns an indivisible interest in real property as tenants by the entireties executes a transfer on death designation affidavit, upon the death of the individual, title to the real property or interest in the real property vests in the remaining tenant by the entireties. Upon the death of the remaining tenant by the entireties, title to the real property or interest in the real property vests in the transfer on death beneficiary or beneficiaries designated in the affidavit, subject to section 565C.2.
   3.  A transfer on death designation affidavit shall be verified before any person authorized to administer oaths and shall include all of the following:
   a.  A description of the real property affected by the affidavit and a reference to an instrument of record containing that description.
   b.  If less than the entire interest in the real property is to be transferred on death under the affidavit, a statement of the specific interest or part of the interest in the real property that is to be so transferred.
   c.  A statement by the individual executing the affidavit that the individual is the person appearing on the instrument of record of the real property as the owner of the real property or interest in the real property at the time of the recording of the affidavit and the marital status of the owner. If the owner is married, the affidavit shall include a statement by the owner’s spouse stating that the spouse’s dower rights are subordinate to the vesting of title to the real property or interest in the real property in the transfer on death beneficiary or beneficiaries designated in the affidavit.
   d.  A statement designating one or more persons, identified by name, as the transfer on death beneficiary or beneficiaries.
   4.  The county recorder of the county in which a transfer on death designation affidavit is offered for recording shall receive the affidavit and record it in the same manner as deeds are recorded. The county recorder shall collect a fee for recording the affidavit in the same amount as the fee for recording deeds. The county recorder shall index the affidavit in the name of the owner of record of the real property or interest in the real property who executed the affidavit.
   5.  A transfer on death designation affidavit need not require consideration and need not be delivered to the transfer on death beneficiary or beneficiaries designated in the affidavit to be effective. However, in order to be effective, such affidavit shall be recorded with the county recorder prior to the death of the individual who executed the affidavit.
   6.  Upon the death of any individual who owns real property or an interest in real property that is subject to a transfer on death beneficiary designation made under a transfer on death designation affidavit as provided in this section, the real property or interest in real property of the deceased owner shall be transferred only to the transfer on death beneficiary or beneficiaries who are identified in the affidavit by name and who survive the deceased owner or who are in existence on the date of death of the deceased owner.
   7.  Any person who knowingly makes a false statement in a transfer on death designation affidavit is guilty of a serious misdemeanor.
   8.  The attorney general shall prescribe forms and adopt rules pursuant to chapter 17A as necessary to administer this section.
    Sec. 3.  NEW SECTION.  565C.2  Designating transfer on death beneficiary.
   1.  A transfer on death beneficiary takes only the interest that a deceased owner of the interest held on the date of death, subject to all encumbrances, reservations, and exceptions.
   2.  If two or more owners hold title to the interest in a surviving joint tenancy, the death of all except the last surviving joint tenant automatically terminates and nullifies any transfer on death beneficiary designations made solely by the deceased surviving joint tenant or tenants without joinder by the last surviving joint tenant. The termination or nullification of any transfer on death beneficiary designations under this section is effective as of the date of death of a deceased surviving joint tenant. No affirmative act of revocation is required of the last surviving joint tenant for the termination or nullification of the transfer on death beneficiary designations to occur as described in this subsection. If the last surviving joint tenant dies without a transfer on death beneficiary designation, the entire interest of that last surviving joint tenant shall be distributed as part of that tenant’s probate estate.
   3.  If owners hold title to the interest in a tenancy by the entireties, the death of the first tenant by the entireties automatically terminates and nullifies any transfer on death beneficiary designations made solely by that deceased first tenant without joinder by the remaining tenant by the entireties. The termination or nullification of any transfer on death beneficiary designations under this subsection is effective as of the date of death of the first tenant by the entireties. No affirmative act of revocation is required of the remaining tenant by the entireties for the termination or nullification of the transfer on death beneficiary designations to occur as described in this subsection. If the remaining tenant by the entireties dies without a transfer on death beneficiary designation, the entire interest of that remaining tenant shall be distributed as part of that tenant’s probate estate.
    Sec. 4.  APPLICABILITY.
   1.  This Act does not affect any deed executed and recorded prior to the effective date of this Act. 
   2.  This Act applies to a transfer on death designation affidavit recorded on or after the effective date of this Act.
EXPLANATION
   TRANSFER ON DEATH DESIGNATION AFFIDAVIT. The bill creates a transfer on death designation affidavit and provides that any individual who owns real property or any interest in real property as a sole owner, tenant in common, or surviving joint tenant, or along with the individual’s spouse, as a tenant by the entireties, may designate the entire interest, or any specified part that is less than the entire interest, in that real property as transferable on death to a designated beneficiary or beneficiaries by executing, together with the individual’s spouse, if any, a transfer on death designation affidavit. If the affidavit is executed by an individual together with the individual’s spouse, if any, the dower rights of the spouse are subordinate to the vesting of title to the interest in the real property in the transfer on death beneficiary or beneficiaries designated in the affidavit.
   TRANSFER —— TYPES OF PROPERTY INTERESTS.
   SOLE OWNER —— TENANT IN COMMON. If an individual who owns real property or an interest in real property as a sole owner or as a tenant in common executes a transfer on death designation affidavit, upon the death of that individual, title to the real property or interest in the real property specified in the affidavit vests in the transfer on death beneficiary or beneficiaries designated in the affidavit. 
   SURVIVING JOINT TENANT. If an individual who owns real property or an interest in real property as a surviving joint tenant executes a transfer on death designation affidavit, upon the death of that individual or of one but not all of the surviving joint tenants, title to the real property or interest in the real property specified in the affidavit vests in the surviving joint tenant or tenants. Upon the death of the last surviving joint tenant, title to the real property or interest in the real property vests in the transfer on death beneficiary or beneficiaries designated in the affidavit, subject to the interest that the deceased owner or owners of the interest held on the date of death, and subject to all encumbrances, reservations, and exceptions.
   TENANTS BY THE ENTIRETIES. If an individual who together with the individual’s spouse owns an indivisible interest in real property as tenants by the entireties executes a transfer on death designation affidavit, upon the death of that individual, title to the real property or interest in the real property vests in the remaining tenant by the entireties. Upon the death of the remaining tenant by the entireties, title to the real property or interest in the real property vests in the transfer on death beneficiary or beneficiaries designated in the affidavit, subject to the interest that the deceased owner or owners of the interest held on the date of death, and subject to all encumbrances, reservations, and exceptions.
   AFFIDAVIT INFORMATION. A transfer on death designation affidavit shall be verified before any person authorized to administer oaths and shall include certain information including a description of the real property affected and a reference to an instrument of record containing that description, a statement of the specific interest or part of the interest in the real property that is to be transferred, a statement by the individual executing the affidavit that the individual is the person appearing on the instrument of record of the real property as the owner of the real property or interest in the real property at the time of the recording of the affidavit and the marital status of that owner and a statement by the owner’s spouse, if applicable, stating that the spouse’s dower rights are subordinate to the vesting of title to the real property or interest in the real property in the transfer on death beneficiary or beneficiaries designated in the affidavit, and a statement designating the name of one or more persons as transfer on death beneficiary or beneficiaries.
   RECORDING —— COUNTY RECORDER. The county recorder of the county in which a transfer on death designation affidavit is offered for recording shall receive the affidavit and record the affidavit in the same manner as deeds are recorded. The county recorder shall collect a fee for recording the affidavit in the same amount as the fee for recording deeds and shall index the affidavit in the name of the owner of record of the real property or interest in the real property who executed the affidavit. The affidavit is required to be recorded with the county recorder prior to the death of the individual who executed the affidavit. The bill makes a conforming change to Code section 331.602 relating to the duties of a county recorder.
   BENEFICIARY IDENTIFICATION. Upon the death of any individual who owns real property or an interest in real property that is subject to a transfer on death beneficiary designation made under a transfer on death designation affidavit, the real property or interest in real property of the deceased owner can only be transferred to the transfer on death beneficiary or beneficiaries who are identified in the affidavit by name and who survive the deceased owner or who are in existence on the date of death of the deceased owner.
   FALSE STATEMENT —— PENALTY. A person who knowingly makes a false statement in a transfer on death designation affidavit is guilty of a serious misdemeanor.
   RULES. The attorney general is required to prescribe forms and adopt rules pursuant to Code chapter 17A to administer the requirements of the bill.
   APPLICABILITY. The bill does not affect any deed executed and recorded prior to the effective date of the bill and applies to a transfer on death designation affidavit recorded on or after the effective date of the bill.