Nonprobate Transfers

Division 5, Part 1 of the Probate Code deals with nonprobate transfers and provisions relating to the effect of death.

Section 5000 provides that a provision for a nonprobate transfer on death in an insurance policy, contract of employment, bond, mortgage, promissory note, certificated or uncertificated security, account agreement, custodial agreement, deposit agreement, compensation plan, pension plan, individual retirement plan, employee benefit plan, trust, conveyance, deed of gift, revocable transfer on death deed, marital property agreement, or other written instrument of a similar nature is not invalid because the instrument does not comply with the requirements for execution of a will, and this code does not invalidate the instrument.

Section 5002 states that a holder of property under an instrument is not required to receive, hold, or transfer the property in compliance with a provision for a nonprobate transfer on death executed by a person who has an interest in the property if either the person is not authorized by the terms of the instrument to execute a provision for transfer of the property, or the provision for transfer of the property does not otherwise satisfy the terms of the instrument.

Section 5003 explains that a holder of property under an instrument may transfer the property in compliance with a provision for a nonprobate transfer on death that satisfies the terms of the instrument, whether or not the transfer is consistent with the beneficial ownership of the property as between the person who executed the provision for transfer of the property and other persons having an interest in the property or their successors, and whether or not the transfer is consistent with the rights of the person named as beneficiary.

Chapter 2 deals with nonprobate transfers of community property. Section 5010 defines the term “written consent.”

Section 5011 states that the rights of the parties in a nonprobate transfer of community property on death are subject to three specified requirements.

Section 5012 explains that a provision of this chapter concerning rights between a married person and the person’s spouse in community property is relevant only to controversies between the person and spouse and their successors and does not affect the obligation of a holder of community property under an instrument of a type to hold, receive, or transfer the property in compliance with a provision for a nonprobate transfer on death, or the protection provided the holder.

Section 5013 states that nothing in this chapter limits the effect of a surviving spouse’s waiver of rights in community property or other instrument or agreement that affects a married person’s interest in community property.

Section 5014 explains that this chapter applies to a provision for a nonprobate transfer of community property on the death of a married person, regardless of whether the provision for transfer of the property was executed by the person, or written consent to the provision for transfer of the property was given by the person’s spouse.

Section 5015 says that nothing in this chapter limits the application of principles of fraud, undue influence, duress, mistake, or other invalidating cause to a written consent to a provision for a nonprobate transfer of community property on death.

Chapter 3 deals with nonprobate transfers to a former spouse. Section 5040 provides that a nonprobate transfer to the transferor’s former spouse, in an instrument executed by the transferor before or during the marriage or registered domestic partnership, fails if, at the time of the transferor’s death, the former spouse is not the transferor’s surviving spouse, as a result of the dissolution or annulment of the marriage or termination of registered domestic partnership.

This provision does not cause a nonprobate transfer to fail in any of three specified cases. Where a nonprobate transfer fails by operation of this section, the instrument making the nonprobate transfer is to be treated as it would if the former spouse failed to survive the transferor.

Section 5042 states that a joint tenancy between the decedent and the decedent’s former spouse, created before or during the marriage or registered domestic partnership, is severed as to the decedent’s interest if, at the time of the decedent’s death, the former spouse is not the decedent’s surviving spouse, as a result of the dissolution or annulment of the marriage or registered domestic partnership.

This section does not sever a joint tenancy in either of two specified cases. The term “joint tenancy” is defined.

Section 5044 explains that nothing in this chapter affects the rights of a purchaser or encumbrancer of real property for value who in good faith relies on an affidavit or a declaration under penalty of perjury under the laws of this state that states six specified items of information.

Section 5046 explains that nothing in this chapter is intended to limit the court’s authority to order a party to a dissolution or annulment of marriage to maintain the former spouse as a beneficiary on any nonprobate transfer described in this chapter, or to preserve a joint tenancy in favor of the former spouse.