HB5235 96TH GENERAL ASSEMBLY

LRB096 19101 AJO 34492 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB5235

Introduced 2/3/2010, by Rep. Patricia R. Bellock

SYNOPSIS AS INTRODUCED:

New Act

Creates the Transfer on Death Deeds Act. Contains provisions that concern: definitions; the effect of a transfer on death deed; rights of creditors; rights of the State and governmental entities; multiple grantee beneficiaries; successor grantee beneficiaries; multiple joint tenant grantors; execution by attorney-in-fact; recording requirements and authorization; deed to trustee or other entity; revocation or modification of transfer on death deed; antilapse; deceased beneficiary; words of survivorship; lapse; multiple transfer on death deeds; nonademption; unpaid proceeds of sale, condemnation, or insurance; sale by conservator or guardian; nonexoneration; disclaimer by beneficiary; effect on other conveyances; notice, consent, and delivery not required; nonrevocation by will; proof of survivorship; after-acquired property; anticipatory alienation prohibited; form of transfer on death deed; and form of instrument of revocation.

A BILL FOR

AN ACT concerning deeds.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Transfer on Death Deeds Act.

Section 5. Definitions. As used in this Act:

"Beneficiary" or "grantee beneficiary" means a person or entity named as a grantee beneficiary in a transfer on death deed, including a successor grantee beneficiary.

"Grantor owner" means an owner named as a grantor in a transfer on death deed upon whose death the conveyance or transfer of the described real property is conditioned. Grantor owner does not include a spouse who joins in a transfer on death deed solely for the purpose of conveying or releasing statutory or other marital interests in the real property to be conveyed or transferred by the transfer on death deed.

"Owner" means a person having an ownership or other interest in all or part of the real property to be conveyed or transferred by a transfer on death deed. Owner does not include a spouse who joins in a transfer on death deed solely for the purpose of conveying or releasing statutory or other marital interests in the real property to be conveyed or transferred by the transfer on death deed.

"Recorded" means recorded in the office of the recorder, as appropriate, for the real property described in the instrument to be recorded.

"State agency" means the Department of Health and Human Services or any successor agency.

"Transfer on death deed" means a deed authorized under this Act.

Section 10. Effect of transfer on death deed. A deed that (i) conveys or assigns an interest in real property, including a mortgage, judgment, or any other lien on real property, to a grantee beneficiary and (ii) expressly states that the deed is only effective on the death of one or more of the grantor owners transfers the interest to the grantee beneficiary upon the death of the grantor owner upon whose death the conveyance or transfer is stated to be effective. A transfer on death deed must comply with all provisions of Illinois law applicable to deeds of real property.

Section 15. Rights of creditors and rights of State and governmental entities. The interest transferred to a beneficiary under a transfer on death deed after the death of a grantor owner is transferred subject to all effective conveyances, assignments, contracts, mortgages, deeds of trust, liens, security pledges, judgments, tax liens, and other encumbrances made by the grantor owner or to which the property was subject during the grantor owner's lifetime, including, but not limited to, any claim by a surviving spouse or any claim or lien by the State or a governmental entity, if other assets of the deceased owner's estate are insufficient to pay the amount of that claim. A beneficiary to whom the interest is transferred after the death of a grantor owner shall be liable to account to the State or any governmental entity with a claim or lien, to the extent necessary to discharge the claim remaining unpaid after application of the assets of the deceased grantor owner's estate, but that liability shall be limited to the value of the interest transferred to the beneficiary.

Section 20. Multiple grantee beneficiaries. A transfer on death deed may designate multiple grantee beneficiaries to take title as joint tenants, as tenants in common, tenants by the entirety, or in any other form of ownership or tenancy that is valid under law.

Section 25. Successor grantee beneficiaries. A transfer on death deed may designate one or more successor grantee beneficiaries or a class of successor grantee beneficiaries, or both. If the transfer on death deed designates successor grantee beneficiaries or a class of successor grantee beneficiaries, the deed shall state the condition under which the interest of the successor grantee beneficiaries would vest.

Section 30. Multiple joint tenant grantors. If an interest in real property is owned as joint tenants, a transfer on death deed executed by all of the owners that conveys an interest in real property to one or more grantee beneficiaries transfers the interest to the grantee beneficiary or beneficiaries effective only after the death of the last surviving grantor owner. If the last surviving joint tenant owner did not execute the transfer on death deed, the deed is ineffective to transfer any interest, and the deed is void. A joint tenancy is not severed or affected by the subsequent execution of a transfer on death deed, and the right of a surviving joint tenant who did not execute the transfer on death deed shall prevail over a grantee beneficiary named in a transfer on death deed unless the deed specifically states that it severs the joint tenancy ownership.

Section 35. Execution by attorney-in-fact. A transfer on death deed may be executed by a duly appointed attorney-in-fact pursuant to a power of attorney that grants the attorney-in-fact the authority to execute deeds.

Section 40. Recording requirements and authorization. A transfer on death deed is valid if the deed is recorded in a county in which at least a part of the real property described in the deed is located and is recorded before the death of the grantor owner upon whose death the conveyance or transfer is effective. A transfer on death deed is not effective until the deed is recorded in the county in which the real property is located. A transfer on death deed that otherwise satisfies all statutory requirements for recording may be recorded and shall be accepted for recording in the county in which the property described in the deed is located.

Section 45. Deed to trustee or other entity. A transfer on death deed may transfer an interest in real property to the trustee of an inter vivos trust, even if the trust is revocable, to the trustee of a testamentary trust, or to any other entity legally qualified to hold title to real property under law.

Section 50. Revocation or modification of transfer on death deed.

(a) A transfer on death deed may be revoked at any time by the grantor owner or, if there is more than one grantor owner, by a grantor owner. To be effective, the revocation must be recorded in the county in which at least a part of the real property is located before the death of the grantor owner or owners who execute the revocation. The revocation is not effective until the revocation is recorded in the county in which the real property is located. Subject to Section 30, if the real property is owned by joint tenants and if the revocation is not executed by all of the grantor owners, the revocation is not effective unless executed by the last surviving grantor owner.

(b) If a grantor owner conveys to a third party, after the recording of the transfer on death deed, by means other than a transfer on death deed, all or a part of the grantor owner's interest in the property described in the transfer on death deed, no transfer of the conveyed interest shall occur on the grantor owner's death, and the transfer on death deed shall be ineffective as to the conveyed or transferred interests, but the transfer on death deed remains effective with respect to the conveyance or transfer on death of any other interests described in the transfer on death deed owned by the grantor owner at the time of the grantor owner's death.

(c) A transfer on death deed, except as may otherwise be specifically provided for in the transfer on death deed, is subject to the same provisions as to revocation, revival, and nonrevocation.

Section 55. Antilapse; deceased beneficiary; words of survivorship.

(a) If a grantee beneficiary who is a grandparent or lineal descendant of a grandparent of the grantor owner fails to survive the grantor owner, the issue of the deceased grantee beneficiary who survive the grantor owner take in place of the deceased grantee beneficiary. If they are all of the same degree of kinship to the deceased grantee beneficiary, they take equally. If they are of unequal degree, those of more remote degree take by right of representation.

(b) For the purposes of this Section, words of survivorship such as, in a conveyance to an individual, "if he or she survives me," or, in a class gift, to "my surviving children," are a sufficient indication of intent to condition the conveyance or transfer upon the beneficiary surviving the grantor owner.

Section 60. Lapse. If all beneficiaries and all successor beneficiaries, if any, designated in a transfer on death deed and all successor beneficiaries who would take under the antilapse provisions of Section 55 fail to survive the grantor owner or the last survivor of the grantor owners if there are multiple grantor owners, or if the beneficiary is a trust which has been revoked prior to the grantor owner's death, or if the beneficiary is an entity no longer in existence at the grantor owner's death, then no transfer shall occur, and the transfer on death deed is void.

Section 65. Multiple transfer on death deeds. If a grantor owner executes and records more than one transfer on death deed conveying the same interest in real property or a greater interest in the real property, the transfer on death deed that has the latest acknowledgment date and that is recorded before the death of the grantor owner upon whose death the conveyance or transfer is conditioned is the effective transfer on death deed, and all other transfer on death deeds, if any, executed by the grantor owner or the grantor owners are ineffective to transfer any interest and are void.

Section 70. Nonademption; unpaid proceeds of sale, condemnation, or insurance; sale by conservator or guardian. If at the time of the death of the grantor owner upon whose death the conveyance or transfer is stated to be effective, the grantor owner did not own a part or all of the real property described in the transfer on death deed, no conveyance or transfer to the beneficiary of the non-owned part of the real property shall occur upon the death of the grantor owner, and the transfer on death deed is void as to the non-owned part of the real property, but the beneficiary shall have the same rights to unpaid proceeds of sale, condemnation, or insurance, and, if sold by a conservator or guardian of the grantor owner during the grantor owner's lifetime, the same rights to a general pecuniary devise as that of a specific devisee.

Section 75. Nonexoneration. Except as otherwise provided in Section 15, a conveyance or transfer under a transfer on death deed passes the described property subject to any mortgage or security interest existing at the date of death of the grantor owner, without right of exoneration, regardless of any statutory obligations to pay the grantor owner's debts upon death and regardless of a general directive in the grantor owner's will to pay debts.

Section 80. Disclaimer by beneficiary. A grantee beneficiary's interest under a transfer on death deed may be disclaimed as provided by law.

Section 85. Effect on other conveyances. This Section does not prohibit other methods of conveying property that are permitted by law and that have the effect of postponing ownership or enjoyment of an interest in real property until the death of the owner. This Section does not invalidate any deed that is not a transfer on death deed and that is otherwise effective to convey title to the interests and estates described in the deed that is not recorded until after the death of the owner.

Section 90. Notice, consent, and delivery not required. The signature, consent, or agreement of, or notice to, a grantee beneficiary under a transfer on death deed, or delivery of the transfer on death deed to the grantee beneficiary, is not required for any purpose during the lifetime of the grantor owner.

Section 95. Nonrevocation by will. A transfer on death deed that is executed, acknowledged, and recorded in accordance with this Act is not revoked by the provisions of a will.

Section 100. After-acquired property. Except as provided in this Section, a transfer on death deed is not effective to transfer any interest in real property acquired by a grantor owner subsequent to the date of signing of a transfer on death deed. A grantor owner may provide by specific language in a transfer on death deed that the transfer on death deed will apply to any interest in the described property acquired by the grantor owner after the signing or recording of the deed.

Section 105. Anticipatory alienation prohibited. The interest of a grantee beneficiary under a transfer on death deed which has not yet become effective is not subject to alienation; assignment; encumbrance; appointment or anticipation by the beneficiary; garnishment; attachment; execution or bankruptcy proceedings; claims for support or maintenance; payment of other obligations by any person against the beneficiary; or any other transfer, voluntary or involuntary, by or from any beneficiary.

Section 110. Form of transfer on death deed. A transfer on death deed may be substantially in the following form:

Transfer on Death Deed

I (we) ....................(grantor owner or owners and spouses, if any, with marital status designated), grantor(s), hereby convey(s) and quitclaim(s) to .................... (grantee beneficiary, whether one or more) effective (check only one of the following)

..... on the death of the grantor owner, if only one grantor is named above, or on the death of the last of the grantor owners to die, if more than one grantor owner is named above, or ..... on the death of (name of grantor owner)

.................... (must be one of the grantor owners named above), the following described real property:

(Legal description)

If checked, the following optional statement applies: ..... When effective, this instrument conveys any and all interests in the described real property acquired by the grantor owner(s) before, on, or after the date of this instrument.

(Signature of grantor(s)) (acknowledgment)

Section 115. Form of instrument of revocation. An instrument of revocation may be substantially in the following form:

Revocation of Transfer on Death Deed

The undersigned hereby revokes the transfer on death deed recorded on .........., ....., as Document No. .......... (or in Book .......... of.........., Page .....) in the office of the Recorder of .......... County, Illinois, affecting real property legally described as follows:

(legal description) Dated:

Signature (acknowledgment)