HB1153 EngrossedLRB097 00025 AJO 47182 b

1    AN ACT concerning civil law.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Illinois Residential Real Property Transfer on Death
6Instrument Act.
 
7    Section 5. Definitions. In this Act:
8    "Beneficiary" means a person that receives residential
9real estate under a transfer on death instrument.
10    "Designated beneficiary" means a person designated to
11receive residential real estate in a transfer on death
12instrument.
13    "Joint owner" means an individual who owns residential real
14estate concurrently with one or more other individuals with a
15right of survivorship. The term includes a joint tenant or a
16tenant by the entirety. The term does not include a tenant in
17common.
18    "Owner" means an individual who makes a transfer on death
19instrument.
20    "Person" means an individual, corporation, business trust,
21land trust, estate, inter-vivos revocable or irrevocable
22trust, testamentary trust, partnership, limited liability
23company, association, joint venture, public corporation,

 

 

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1government or governmental subdivision, agency, or
2instrumentality, or any other legal or commercial entity.
3    "Residential real estate" means real property improved
4with not less than one nor more than 4 residential dwelling
5units, units in residential cooperatives; or, condominium
6units, including the limited common elements allocated to the
7exclusive use thereof that form an integral part of the
8condominium unit; or a single tract of agriculture real estate
9consisting of 40 acres or less which is improved with a single
10family residence.
11    "Transfer on death instrument" means an instrument
12authorized under this Act.
 
13    Section 10. Applicability. This Act applies to only a
14transfer of residential real estate as defined in this Act by
15means of a transfer on death instrument made before, on, or
16after the effective date of this Act, by an owner dying on or
17after the effective date of this Act.
 
18    Section 15. Non-exclusivity. This Act does not affect any
19method of transferring residential real estate otherwise
20permitted under the law of this State.
 
21    Section 20. Transfer on death instrument authorized. An
22owner may transfer residential real estate by a transfer on
23death instrument to one or more beneficiaries as owners,

 

 

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1concurrently or successively, and upon any contingency,
2effective at the owner's death.
 
3    Section 25. Transfer on death instrument revocable. A
4transfer on death instrument is revocable even if the
5instrument or another instrument contains a contrary
6provision.
 
7    Section 30. Transfer on death instrument nontestamentary.
8A transfer on death instrument is a nontestamentary instrument
9and is subject to all other laws governing or affecting
10nontestamentary instruments.
 
11    Section 35. Capacity of owner and agent's authority. The
12capacity required to make or revoke a transfer on death
13instrument is the same as the capacity required to make a will.
14Unless expressly authorized by the owner under a power of
15attorney or similar instrument creating an agency, an agent for
16an owner does not have the authority to create or revoke a
17transfer on death instrument.
 
18    Section 40. Requirements. A transfer on death instrument:
19        (1) must contain the essential elements and
20    formalities of a properly recordable inter vivos deed; and
21    must be executed, witnessed, and acknowledged in
22    compliance with Section 45;

 

 

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1        (2) must state that the transfer to the designated
2    beneficiary is to occur at the owner's death; and
3        (3) must be recorded before the owner's death in the
4    public records in the office of the recorder of the county
5    or counties in which any part of the residential real
6    estate is located.
 
7    Section 45. Signing, attestation, and acknowledgement.
8Every transfer on death instrument shall be signed by the owner
9or by some person in his or her presence and by his or her
10direction, and shall be attested in writing by 2 or more
11credible witnesses, whose signatures along with the owner's
12signature shall be acknowledged by a notary public. The
13witnesses shall attest in writing that on the date thereof the
14owner executed the transfer on death instrument in their
15presence as his or her own free and voluntary act, and that at
16the time of the execution the witnesses believed the owner to
17be of sound mind and memory.
 
18    Section 50. Notice, delivery, or consideration not
19required. A transfer on death instrument is effective without:
20        (1) notice or delivery to the designated beneficiary
21    during the owner's life; or
22        (2) consideration.
 
23    Section 55. Revocation by recorded instrument authorized;

 

 

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1revocation by act or unrecorded instrument, not authorized.
2     (a) An instrument is effective to revoke a recorded
3transfer on death instrument, or any part of it, only if
4        (1) it is:
5            (A) another transfer on death instrument that
6        revokes the instrument or part of the instrument
7        expressly or by inconsistency; or
8            (B) an instrument of revocation that expressly
9        revokes the instrument or part of the instrument; and
10        (2) it is
11            (A) executed, witnessed, and acknowledged in the
12        same manner as is required by Section 45 on a date that
13        is after the date of the acknowledgment of the
14        instrument being revoked; and
15            (B) recorded before the owner's death in the public
16        records in the office of the recorder of the county or
17        counties where the prior transfer on death instrument
18        is recorded.
19    (b) A transfer on death instrument executed and recorded in
20accordance with this Act may not be revoked by a revocatory act
21on the instrument, by an unrecorded instrument, or by a
22provision in a will.
 
23    Section 60. Effect of transfer on death instrument during
24owner's life.
25    (a) During an owner's life, a transfer on death instrument

 

 

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1does not:
2            (1) affect the right of the owner, any other owner,
3        or an agent for the owner to sell or encumber the
4        residential real estate;
5            (2) affect an interest or right of a transferee,
6        lienholder, mortgagee, option holder or grantee even
7        if the transferee, lienholder, mortgagee, option
8        holder or grantee has actual or constructive notice of
9        the instrument;
10            (3) affect an interest or right of a secured or
11        unsecured creditor or future creditor of the owner,
12        even if the creditor has actual or constructive notice
13        of the instrument;
14            (4) affect the owner's or designated beneficiary's
15        eligibility for any form of public assistance;
16            (5) create a legal or equitable interest in favor
17        of the designated beneficiary; or
18            (6) subject the residential real estate to claims
19        or process of a creditor of the designated beneficiary.
20     (b) If after recording a transfer on death instrument, the
21owner makes a contract for the sale or transfer of the
22residential real estate or some part thereof that is the
23subject of the transfer on death instrument and the whole or
24any part of the contract remains executory at the owner's
25death, the disposition of the residential real estate by the
26contract does not revoke the transfer on death instrument but

 

 

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1the residential real estate passes to the designated
2beneficiary or beneficiary subject to the contract.
 
3    Section 65. Effect of transfer on death instrument at
4owner's death.
5    (a) Except as otherwise provided in the transfer on death
6instrument, in this Section, or in the Probate Act of 1975 or
7any other Act applicable to nontestamentary instruments, on the
8death of the owner, the following rules apply to residential
9real estate that is the subject of a transfer on death
10instrument and owned by the owner at death:
11        (1) Subject to the beneficiary's right to disclaim or
12    refuse to accept the transfer, the interest in the
13    residential real estate is transferred to the beneficiary
14    in accordance with the instrument.
15        (2) If a designated beneficiary fails to survive the
16    owner or is not in existence on the date of the owner's
17    death, then except as provided in paragraph (3) the
18    residential real estate shall pass to the owner's estate.
19        (3) Unless the owner provides otherwise, if the
20    designated beneficiary is a descendant of the owner who
21    dies before the owner, the descendants of the deceased
22    designated beneficiary living at the time of the owner's
23    death shall take the residential real estate per stirpes.
24    If the designated beneficiary is one of a class of
25    designated beneficiaries, and any member of the class dies

 

 

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1    before the owner, the members of the class living when the
2    owner dies shall take the share or shares which the
3    deceased member would have taken if he or she were then
4    living, except that if the deceased member of the class is
5    a descendant of the owner, the descendants of the deceased
6    member then living shall take per stirpes the share or
7    shares which the deceased member would have taken if he or
8    she were then living.
9    (b) Subject to the Probate Act of 1975 and the Conveyances
10Act, a beneficiary takes the residential real estate subject to
11all conveyances, encumbrances, assignments, contracts,
12options, mortgages, liens, and other interests to which the
13residential real estate is subject at the owner's death.
14    (c) A transfer on death instrument transfers residential
15real estate without covenant or warranty of title even if the
16instrument contains a contrary provision.
17    (d) If there is no sufficient evidence of the order of the
18owner and designated beneficiary's deaths, otherwise than
19simultaneously, and there is no other provision in the transfer
20on death instrument, for purposes of this Section, the
21designated beneficiary shall be deemed to have predeceased the
22owner.
 
23    Section 70. Joint owners.
24    (a) One or more joint owners may execute a transfer on
25death instrument.

 

 

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1    (b) If all of the joint owners execute a transfer on death
2instrument, then an instrument of joint owners is revoked only
3if it is revoked by all of the then living joint owners. A
4transfer on death instrument is revocable by the last surviving
5joint owner notwithstanding any contract or agreement between
6the joint owners to the contrary.
7    (c) If less than all of the joint owners execute a transfer
8on death instrument, the transfer on death instrument will be
9governed by the designation of the joint owner who is the last
10to die of all the joint owners. If the last to die joint owner
11did not execute a transfer on death instrument, the designation
12of any prior deceased joint owner is ineffective.
13    (d) A transfer on death instrument shall not sever a joint
14tenancy or tenancy by the entirety.
 
15    Section 75. Notice of death affidavit, acceptance and
16effective date of transfer. A transfer on death instrument is
17effective as of the owner's death upon the filing of a notice
18of death affidavit and acceptance by the beneficiary or
19beneficiaries in the office of the recorder in the county or
20counties where the residential real estate is located. The
21notice of death affidavit and acceptance shall contain the name
22and address of each beneficiary who shall take under the
23transfer on death instrument, a legal description of the
24property, the street address, and parcel identification number
25of the residential real estate, the name of the deceased owner,

 

 

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1and the date of death. The notice of death affidavit and
2acceptance shall be signed by each beneficiary or by the
3beneficiary's authorized representative.
 
4    Section 80. Disclaimer. A beneficiary may disclaim all or
5part of the beneficiary's interest as provided by Disclaimers
6Under Nontestamentary Instrument Act.
 
7    Section 85. Rights of creditors and statutory claimants. A
8beneficiary of a transfer on death instrument is subject to the
9claims of creditors and statutory claimants to the same extent
10as a beneficiary of any nontestamentary transfer.
 
11    Section 90. Limitations. An action to set aside or contest
12the validity of a transfer on death instrument shall be
13commenced within the earlier of 2 years after the date of the
14owner's death or 6 months from the date that letters of office
15are issued.
 
16    Section 95. Preparation of a transfer on death instrument
17or its revocation is the practice of law. The drafting and
18preparation of a transfer on death instrument or its
19revocation, and the supervision of its execution or revocation
20is the practice of law. Any non-lawyer who drafts, prepares or
21supervises the execution or revocation of a transfer on death
22instrument for another is guilty of an unlawful practice within

 

 

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1the meaning of the Consumer Fraud and Deceptive Business
2Practices Act. Nothing in this Section shall prohibit an owner
3from drafting or supervising the execution or revocation of his
4or her own transfer on death instrument.
 
5    Section 100. Form of notice of death affidavit and
6acceptance. The following form shall be used to give notice of
7the owner's death and to accept the transfer by the
8beneficiary:
9(front of form)
10NOTICE: This Notice of Death Affidavit and Acceptance form or
11equivalent form must be recorded by the beneficiary after the
12death of the owner to make the transfer on death instrument
13effective. You should consult a lawyer before using this form.
 
14
NOTICE OF DEATH AFFIDAVIT AND ACCEPTANCE OF
15
TRANSFER ON DEATH INSTRUMENT
16PREPARED BY AND RETURN TO:
 
17SEND SUBSEQUENT TAX BILL TO:
 
18The undersigned beneficiary or beneficiaries, being duly sworn
19on oath, state as follows:
 
20That [name of owner] died on ......... , 20...... , a resident
21of [name of county], [name of state], owning residential real

 

 

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1estate legally described below:
 
2[legal description or attach exhibit]
 
3That the street address of the residential real estate is
4[address] and the property identification number is [PIN].
5That the Transfer on Death Instrument is dated ............ and
6recorded as Document No. ........... in the Office of the
7Recorder for .............. County, Illinois.
 
8That the undersigned whose names and addresses appear below are
9all beneficiaries entitled to receive under the Transfer on
10Death Instrument:
 
11Name       Address                 Share
 
12In witness whereof, the undersigned beneficiaries hereby
13accept the transfer of residential real estate under the
14transfer on death instrument this ........... day of
15............, 20........
 
16........................(Seal)     ....................(Seal)
17[Print Name]                       [Print Name]
 
18STATE OF ILLINOIS
19COUNTY OF ..................
 

 

 

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1I, the undersigned, a Notary Public in and for the State
2aforesaid, DO HEREBY CERTIFY THAT [NAME OF BENEFICIARY OR
3BENEFICIARIES] personally known to me to be the same person or
4persons whose name or names are subscribed to the foregoing
5instrument, appeared before me this day in person and swore on
6oath to the above foregoing affidavit. Signed and sworn to
7before me this ............ day of ..............., A.D. 20....
 
8My commission expires on .............
9
(SEAL)
10.......................................  
11   Notary Public