Amends TCA Title 30; Title 31; Title 32; Title 35; Title 55; Title 66 and Section 67-4-409.

This bill creates a process for the nonprobate transfer of real estate and motor vehicles upon the death of the transferor. REAL PROPERTY Under this bill, a transferor may use a transfer on death (TOD) deed to effectuate a revocable, nontestamentary transfer of real property by designating a beneficiary to automatically receive the property upon the transferor's owner's death. The interest in the property will be transferred to and will vest in the designated beneficiary upon the death of the transferor in accordance with the deed. During the transferor's lifetime, the beneficiary of a TOD deed will have no interest in the property and the transferor will retain full power to transfer or encumber the property or to revoke the deed. The following will apply to property that is the subject of a TOD deed and owned by the transferor at death: (1) The designated beneficiary must survive the transferor for the transfer to be effective. In the event the designated beneficiary does not survive the transferor, the transferred interest will lapse; (2) If multiple beneficiaries are designated in a TOD deed, concurrent interests will be transferred in equal and undivided shares to those beneficiaries that survive the transferor; (3) A beneficiary will take the property subject to all conveyances, encumbrances, assignments, contracts, mortgages, liens, claims of the bureau of TennCare or successor entity for medical assistance, and other interests to which the property is subject at the transferor's death; (4) If the transferor is survived by a joint owner of the property with a right of survivorship, then the property will belong to the surviving joint owner with right of survivorship but will remain subject to the naming of the designated beneficiary in the TOD deed; and (5) A TOD deed will transfer property without covenant or warranty of title even if the deed contains provisions to the contrary. During the transferor's life, a TOD deed will not: (1) Affect an interest or right of the transferor or any other owner, including the right to transfer or encumber the property; (2) Affect an interest or right of a transferee, even if the transferee has actual or constructive notice of the deed; (3) Affect an interest or right of a secured or unsecured creditor or future creditor of the transferor, even if the creditor has actual or constructive notice of the deed; (4) Affect the transferor's or designated beneficiary's eligibility for any form of public assistance; (5) Create a legal or equitable interest in favor of the designated beneficiary; or (6) Subject the property to claims or process of creditor of the designated beneficiary. This bill provides an example of a TOD deed that may be used. The following will be required for a TOD deed to be effective: (1) The deed must contain the essential elements and formalities of a properly recordable inter vivos deed; (2) The deed must state that the transfer to the designated beneficiary is to occur upon the transferor's death; and (3) The deed must be recorded before the transferor's death in the public records in the office of the register of deeds of the county where the property is located. A transferor may revoke a recorded TOD deed through the use of any of the following instruments: (1) A TOD deed that expressly revokes the recorded TOD deed or part of the recorded TOD deed; (2) A TOD deed that names a designated beneficiary that is inconsistent with the designated beneficiary in a recorded TOD deed; (3) An instrument of revocation that expressly revokes the recorded TOD deed or part of the recorded TOD deed. This bill provides an example of an instrument of revocation that may be used; and (4) An inter vivos deed that expressly revokes the recorded TOD deed or part of the recorded TOD deed. In order for a revocation to be effective, the transferor must acknowledge the instrument of revocation after the acknowledgment of the deed being revoked, and the instrument must be recorded before the transferor's death in the public records in the office of the register of deeds of the county where the deed is recorded. If a TOD deed is made by more than one transferor, then the revocation by one transferor will not affect the TOD deed as to the interest of the other. In the case of joint owners with a right of survivorship, a TOD deed must be revoked by all living joint owners for such revocation to be effective. In the event that the transferor's probate estate is insufficient to satisfy an allowed claim against the estate or a statutory allowance to a surviving spouse or child, then the estate or a creditor may enforce the liability against property transferred by TOD deed. If a beneficiary conveys property subject to a transfer on death deed before the initiation of an action to enforce a liability, then the estate or a creditor may enforce the liability against the beneficiary up to the value of the property conveyed and obtain a judgment against the beneficiary. If multiple properties were transferred by TOD deed, then such liability may be enforced against any property transferred by a TOD deed. If the beneficiary conveys property before the initiation of an action to enforce liability, the estate or a creditor may enforce the liability against: the beneficiary, the remaining properties that the beneficiary has not conveyed, or both. Any proceeding to enforce liability against property that is the subject of a TOD deed must be commenced no later than 12 months after the transferor's death. For purposes of the above provisions, the designated beneficiary of a TOD deed may be an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity. RECORDATION TAX Present law imposes a tax in the amount of 37 cents per $100 on the privilege of recording a transfer of realty. This bill exempts property transferred by TOD deed from such tax. MOTOR VEHICLES This bill authorizes the owner of a motor vehicle to provide for the transfer of title for the motor vehicle upon the owner's death. In order to do so, the owner must include in the certificate of title a designation of a beneficiary to whom the motor vehicle will be transferred upon the death of the owner, subject to the rights of all lienholders. When a motor vehicle is jointly owned by two or more people, the signatures of all owners will be required to designate a beneficiary. In such a situation, ownership of the vehicle will not vest in the designated beneficiary until the death of the last owner. This bill allows a beneficiary designation to be changed at any time without the consent of the beneficiary by filing an application for a subsequent TOD certificate of title and payment of a $5.50 fee. Upon issuance of any subsequent certificate of title, the previous certificate that was issued will be void.