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Engrossed Version Senate Bill 675 History

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ENGROSSED

Senate Bill No. 675

(By Senators Palumbo, Wills, Browning, Fanning, Foster, Jenkins, Kirkendoll, Klempa, Minard, Snyder, Unger, Williams and Barnes)

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[Originating in the Committee on the Judiciary;

reported February 27, 2012.]

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A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §37-16-1, §37-16-2, §37-16-3, §37-16-4, §37-16-5, §37-16-6, §37-16-7, §37-16-8, §37-16-9 and §37-16-10, all relating to the creation of a transfer on death deed; defining terms; setting requirements for an affidavit of transfer on death deed; detailing transfer on death; requiring verification of the affidavit; requiring that the affidavit be recorded; proclaiming that no consideration is necessary for a transfer on death; permitting revocation; providing that transfer only occurs to the named transferee; creating provisions for trustees of trusts in transfers on death; stating certain requirements for finalizing the transfer on death; setting certain standards, characteristics and ramifications for transfer on death designation affidavits; and creating a misdemeanor offense for knowingly and intentionally making a false statement in an affidavit required by this article.

Be it enacted by the Legislature of West Virginia:

    That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new article, designated §37-16-1, §37-16-2, §37-16-3, §37-16-4, §37-16-5, §37-16-6, §37-16-7, §37-16-8, §37-16-9 and §37-16-10, all to read as follows:

ARTICLE 16. TRANSFER ON DEATH DEED.

§37-16-1. Definitions.

          As used in this article, unless the context clearly indicates otherwise:

    (1) “Survivorship tenancy” means an ownership of real property or any interest in real property by two or more persons that is created by executing a deed pursuant to West Virginia law;

    (2) “Survivorship tenant” means one of the owners of real property or any interest in real property in a survivorship tenancy;

    (3) “Transfer on death designation affidavit” or “affidavit” means an affidavit executed under this article; and

    (4) “Transfer on death beneficiary” or “transfer on death beneficiaries” means the beneficiary or beneficiaries designated in a transfer on death designation affidavit.

§37-16-2. Transfer on death beneficiary affidavit.

    (a) Any individual who, under West Virginia Code or the common law of this state, owns real property or any interest in real property as a sole owner, as a tenant in common, or as a survivorship tenant, 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 consistent with the requirements of this article. The designation of a transfer on death beneficiary has no effect on the present ownership of real property, and a person designated as a transfer on death beneficiary has no interest in the real property until the death of the owner of the interest.

    (b) Any transfer on death of real property or of an interest in real property that results from a transfer on death designation affidavit designating a transfer on death beneficiary is not testamentary. That transfer on death shall supersede any attempted testate or intestate transfer of that real property or interest in real property. If the affidavit is executed, pursuant to this article, by an individual together with the individual’s spouse, if any, the 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 article.

    (c) A fee simple title or any fractional interest in a fee simple title may be subjected to a transfer on death designation affidavit. The affidavit shall include, at a minimum:

    (1) A description of the real property the title to which is affected by the affidavit and a reference to an instrument of record containing that description;

    (2) A statement designating one or more persons, identified by name, as transfer on death beneficiary or beneficiaries;

    (3) A statement by the individual executing the affidavit that the individual is the person appearing on the 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. If the owner is married, the affidavit shall include a statement by the owner’s spouse stating that the spouse’s 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

    (4) 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.

    (5) A statement by the individual executing the affidavit that all beneficiaries and contingent beneficiaries, if any, have been notified that the affidavit will be filed and that if they do not act pursuant to this article to finalize the transfer before the filing of the appraisement of the estate, West Virginia Form ET 6.01, then the interest of the deceased owner may be distributed as part of the probate estate of the deceased owner of the interest and the beneficiaries may lose all right to the property.

    (d) A transfer on death designation affidavit may contain a designation of one or more persons as contingent transfer on death beneficiaries, who shall take the interest of the deceased owner that would otherwise have passed to the transfer on death beneficiary if that named transfer on death beneficiary does not survive the deceased owner or is not in existence on the date of death of the deceased owner. Persons designated as contingent transfer on death beneficiaries shall be identified in the affidavit by name.

    (e) Any transfer on death beneficiary or contingent transfer on death beneficiary may be a natural or legal person, including, but not limited to, a bank as trustee of a trust, except that if two or more transfer on death beneficiaries are designated as survivorship tenants, all of those beneficiaries shall be natural persons and if two or more contingent transfer on death beneficiaries are designated as survivorship tenants, all of those contingent beneficiaries shall be natural persons. A natural person who is designated a transfer on death beneficiary or contingent transfer on death beneficiary solely in that natural person’s capacity as a trustee of a trust is not considered a natural person for purposes of designating the transfer on death beneficiaries or contingent transfer on death beneficiaries as survivorship tenants.

    (f) The affidavit shall meet all the requirements of this article and be recorded in the office of the clerk of the county commission in the county in which the real property is located, and, when so recorded, the affidavit or a certified copy of the affidavit shall be evidence of the transfer on death beneficiary or beneficiaries so designated in the affidavit insofar as the affidavit affects title to the real property.

§37-16-3. Verification required.

    A transfer on death designation affidavit shall be verified before a notary public or any other person authorized to administer oaths.

§37-16-4. Recordation.

    The county commission of the county in which a transfer on death designation affidavit is offered for recording shall receive the affidavit and cause it to be recorded in the same manner as deeds are recorded. The county commission shall collect a fee for recording the affidavit in the same amount as the fee for recording deeds. The county commission 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.

    In order to be effective, the affidavit shall be recorded with the county commission as described in this article prior to the death of the individual who executed the affidavit.

§37-16-5. Consideration not required; revocation without consent.

    A transfer on death designation affidavit need not be supported by consideration and need not be delivered to the transfer on death beneficiary or beneficiaries designated in the affidavit to be effective.

    The designation in a transfer on death designation affidavit of any transfer on death beneficiary may be revoked or changed at any time, without the consent of that transfer on death beneficiary, by the owner of the interest or by the surviving survivorship tenants of the interest, by executing and recording, prior to the death of the owner of the interest or of the surviving survivorship tenants of the interest, as the case may be, a new transfer on death designation affidavit stating the revocation or change in the designation. The new transfer on death designation affidavit shall automatically supersede and revoke all prior recorded transfer on death designation affidavits with respect to the real property or the interest in real property identified in the new affidavit, provided that the prior recorded affidavit was executed before the later recorded affidavit.

§37-16-6. Transfer at death.

    (a) Transfer under a transfer on death designation affidavit must follow this section. First, the type of ownership interest must be evaluated and the affidavit shall be treated as follows:

    (1) 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, subject to the other requirements in this article.

    (2) If an individual who owns real property or an interest in real property as a survivorship tenant executes a transfer on death designation affidavit, upon the death of that individual or of one but not all of the surviving survivorship tenants, title to the real property or interest in the real property specified in the affidavit vests in the surviving survivorship tenant or tenants. Upon the death of the last surviving survivorship tenant, title to the real property or interest in the real property vests in the transfer on death beneficiary or beneficiaries designated in the last surviving survivorship tenant’s affidavit, if any, subject to the other requirements in this article.

    (b) Transfer then occurs as follows and subject to the following conditions:

    (1) An interest of a deceased owner shall be transferred to the transfer on death beneficiaries who are identified in the affidavit by name and who survive the deceased owner or that are in existence on the date of the deceased owner’s death. If there is a designation of more than one transfer on death beneficiary, the beneficiaries shall take title to the interest in equal shares as tenants in common, unless the deceased owner has specifically designated other than equal shares or has designated that the beneficiaries take title as survivorship tenants.

    (2) If a transfer on death beneficiary does not survive the deceased owner or is not in existence on the date of the deceased owner’s death, and the deceased owner has designated one or more persons as contingent transfer on death beneficiaries, the designated contingent transfer on death beneficiaries shall take the same interest that would have passed to the transfer on death beneficiary had that transfer on death beneficiary survived the deceased owner or been in existence on the date of the deceased owner’s death.

    (3) If none of the designated transfer on death beneficiaries survives the deceased owner or is in existence on the date of the deceased owner’s death and no contingent transfer on death beneficiaries have been designated or have survived the deceased owner, or are in existence on the date of death of the deceased owner, the interest of the deceased owner shall be distributed as part of the probate estate of the deceased owner of the interest.

    (4) If there are two or more transfer on death beneficiaries and the deceased owner has designated that title to the interest in the real property be taken by those beneficiaries as survivorship tenants, no designated contingent transfer on death beneficiaries shall take title to the interest unless none of the transfer on death beneficiaries survives the deceased owner on the date of death of the deceased owner.

    (5) If the owners hold title to the interest in a survivorship tenancy, the death of all except the last survivorship tenant automatically terminates and nullifies any transfer on death beneficiary designations made solely by the deceased survivorship tenant or tenants without joinder by the last surviving survivorship tenant. The termination or nullification of any transfer on death beneficiary designations is effective as of the date of death of a deceased survivorship tenant. No affirmative act of revocation is required of the last surviving survivorship tenant for the termination or nullification of the transfer on death beneficiary designations to occur. If the last surviving survivorship tenant dies with no transfer on death beneficiary designation, the entire interest of that last surviving survivorship tenant shall be distributed as part of the last surviving survivorship tenant’s probate estate.

    (6) A transfer on death beneficiary takes only the interest that the deceased owner or owners of the interest held on the date of death, subject to all encumbrances, reservations, exceptions and any previously created life estate or other similar estate in land. No rights of any lien holder, including, but not limited to, any deed of trust, judgment creditor or mechanic’s lien holder, shall be affected by the designation of a transfer on death beneficiary. If any lien holder takes action to enforce the lien, by foreclosure or otherwise through a court proceeding, it is not necessary to join any transfer on death beneficiary whose interest has not vested as a party defendant in the action, unless the transfer on death beneficiary has another interest in the real property.

    (c) Upon the death of an individual who executed a transfer on death affidavit, the transfer of a deceased owner’s real property or interest in real property as designated in a transfer on death affidavit shall be recorded by presenting to the clerk of the county commission of the county in which the real property is located and filing with that county an affidavit of confirmation executed by any transfer on death beneficiary to whom the transfer is made. The affidavit of confirmation shall be filed no later than the filing of the appraisement of the estate, West Virginia Form ET 6.01. If the affidavit of confirmation is not filed before the filing of the appraisement of the state, West Virginia Form ET 6.01, then the executor or administrator of the estate shall send notice to the then-living named beneficiaries or contingent beneficiaries, if any, by certified mail stating that they have thirty days from the date of postage to file an affidavit of confirmation or the interest will be distributed as part of the probate estate. If an affidavit of confirmation is not filed within thirty days of the date of postage of the notice required in the preceding sentence, then the interest of the deceased owner shall be distributed as part of the probate estate of the deceased owner of the interest. Any affidavit of confirmation shall be verified before a notary public or other person authorized to administer oaths and shall be accompanied by a certified copy of the death certificate for the deceased owner. The affidavit of confirmation shall contain all of the following information:

    (1) The name and address of each transfer on death beneficiary who survived the deceased owner or that is in existence on the date of death of the deceased owner. If a named beneficiary was designated as a transfer on death beneficiary solely in that person’s capacity as a trustee of a trust and that trustee subsequently has been replaced by a successor trustee, the affidavit of confirmation shall include the name and address of the successor trustee and shall be accompanied by a copy of a recorded successor trustee affidavit;

    (2) The date of death of the deceased owner;

    (3) A description of the subject real property or interest in real property; and

    (4) The name of each transfer on death beneficiary who has not survived the deceased owner or that is not in existence on the date of death of the deceased owner.

    (d) The affidavit of confirmation shall be accompanied by a certified copy of the death certificate for each transfer on death beneficiary who has not survived the deceased owner.

    (e) The clerk of the county commission shall make an index reference in the record of deeds to any affidavit of confirmation filed with the county commission pursuant to this section.

§37-16-7. Named beneficiary must survive to be effective.

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 article, that real property or interest in real property of the deceased owner shall 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 that are in existence on the date of death of the deceased owner. If no such beneficiary survives, the real property or interest in real property of the deceased owner shall be transferred to the contingent transfer on death beneficiary or beneficiaries, if any, who are identified in the affidavit by name and who survive the deceased owner or that are in existence on the date of death of the deceased owner. If no beneficiaries or contingent beneficiaries survive the deceased owner, then the interest of the deceased owner shall be distributed as part of the probate estate of the deceased owner of the interest.

§37-16-8. Special beneficiary determination for named trustee.

For purposes of this article, if a natural or legal person designated by name in the affidavit as a transfer on death beneficiary or as a contingent transfer on death beneficiary solely in that person’s capacity as a trustee of a trust has died, has resigned or otherwise has been replaced by a successor trustee of the trust on the date of death of the deceased owner, the successor trustee of the trust shall be considered the transfer on death beneficiary or contingent transfer on death beneficiary in existence on the date of death of the deceased owner in full compliance with this article, notwithstanding that the successor trustee is not named as a transfer on death beneficiary or contingent transfer on death beneficiary in the affidavit.

§37-16-9. Liberally construed.

    Any transfer on death designation affidavit containing language that shows a clear intent to designate a transfer on death beneficiary shall be liberally construed to do so. Any survivorship clause in a deed recorded before or after the effective date of this statute in an office of the clerk of a county commission that attempts to create a right of survivorship tenancy, but otherwise fails, and shows a clear intent to designate a beneficiary to receive the property upon death of one or more co-tenants by survivorship shall be liberally construed to be an effective affidavit under this statute.

    The execution and recording of a transfer on death designation affidavit shall be effective to terminate the designation of a transfer on death beneficiary in a transfer on death deed involving the same real property or interest in real property and recorded prior to the effective date of this section.

§37-16-10. Criminal penalties for falsifying an affidavit.

    Any person who knowingly and intentionally makes any false statement in any affidavit required by this article is guilty of a misdemeanor, and, upon conviction thereof, shall be fined not more than $1,000 or confined in jail for not more than one year, or both fined and confined.

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