Law VA Senate Bill 1093 Notary Law Update: VA Senate Bill 1093State: VirginiaSummary:Senate Bill 1093 enacts the Uniform Real Property Transfer on Death Act, authorizing a property owner to transfer interest in the property to a beneficiary upon the death of the owner through a Transfer on Death Deed that must be notarized and filed in the local land records. Signed: March 14, 2013Effective: July 01, 2013Chapter: 390Affects:Adds Sections 64.2-621 through 64.2-638 to the Code of Virginia Changes: Permits the transfer of real property via a transfer on death (TOD) deed upon death of the owner. Requires a transfer on death deed to conform to the formalities (e.g. acknowledgment, notarization) of an inter vivos deed. Requires the transfer on death deed to be recorded prior to the grantor's death. Provides that the transfer on death deed is non-testamentary (a TOD deed is not a “last will” and is not required to be probated as such). Provides that the capacity required to make or revoke a transfer on death deed is the same as the capacity required to make a will. Provides a TOD deed and optional revocation of TOD deed form. Analysis:The Uniform Law Commission (ULC) describes the Uniform Real Property Transfer on Death Act as follows: It “enables an owner of real property to pass real property simply and directly to a beneficiary on the owner’s death without probate. The property passes by operation of law by means of a recorded transfer on death (TOD) deed. During the owner’s lifetime, the beneficiary of a TOD deed has no interest in the property and the owner retains full power to transfer or encumber the property or to revoke the deed. On the owner’s death, the property passes to the beneficiary, much like the survivorship feature of joint tenancy. The TOD deed offers a number of advantages over joint tenancy. Because the TOD deed does not convey an immediate interest to the beneficiary, the property is not subject partition or to the beneficiary’s creditors. The deed remains revocable, enabling the owner to make a different disposition of the property. It does not trigger an acceleration clause in a mortgage or a property tax reassessment during the transferor’s life. Nor does it create adverse Medicaid consequences for either the owner or the beneficiary. A decedent routinely passes personal property to a named beneficiary outside of probate. Common examples include a beneficiary designation in a life insurance policy or pension plan, registration of securities in TOD form, and a pay on death bank account. But a straightforward, inexpensive, and reliable means of passing real property (which may be the decedent’s major asset) directly to a beneficiary is not generally available.” The NNA is tracking enactments of the Uniform Real Property Transfer on Death Act because it is another “high value” documentary transaction that involves the intervention of a Notary Public. In order for a Transfer on Death Deed to be legally enforceable, the TOD deed must be executed according to all the “essential elements and formalities” (including acknowledgment before a Notary) of an inter vivos deed. (An inter vivos deed, unlike a TOD deed, requires present intent to transfer). In its official commentary, the drafting committee extols the virtues of the requirement of acknowledgment before a Notary Public: “In the context of transfer on death deeds, the requirement of acknowledgment fulfills at least four functions. First, it cautions a transferor that he or she is performing an act with legal consequences. Such caution is important where, as here, the transferor does not experience the wrench of delivery because the transfer occurs at death. Second, acknowledgment helps to prevent fraud. Third, acknowledgment facilitates the recording of the deed. Fourth, acknowledgment enables the rule in Section 11 that a later acknowledged deed prevails over an earlier acknowledged deed.” Notaries who notarize a Transfer on Death Deed should treat the document with the utmost care and be especially vigilant to check that the signer is competent and is signing the deed willingly. While any notarization requires a Notary to follow state laws and best practices, this is especially and particularly true of a Transfer on Death Deed. It will rank alongside of other real property deeds, mortgages, deeds of trust, powers of attorney, living trusts and self-proving affidavits to wills as being among the most important and sensitive documents requiring a Notary’s care. Read the bill text.