HB 60-UNIFORM REAL PROPERTY TRANSFERS ON DEATH  2:23:39 PM CHAIR KELLER announced that the next order of business would be HOUSE BILL NO. 60. "An Act adopting and relating to the Uniform Real Property Transfer on Death Act." REPRESENTATIVE GRUENBERG said he is one of the sponsors of HB 60, and he has a committee substitute. REPRESENTATIVE GRUENBERG moved to adopt the proposed committee substitute (CS) for HB 60, labeled 28-LS0265\Y, Bannister, 4/6/14, as the working document. 2:25:09 PM CHAIR KELLER objected. REPRESENTATIVE GRUENBERG said there are two people from out of state on the phone line. One, Thomas Gallanis, is the reporter for the uniform act and is a law professor at the University of Iowa Law School. The reporter is the person who puts the [uniform] act together, he explained. 2:26:17 PM THOMAS GALLANIS, Professor, University of Iowa Law School, said he was the reporter for the Uniform Property Transfer on Death Act. He said he does not have prepared remarks; however, he fully associates himself with the written testimony, which was submitted on March 21 to the Labor and Commerce Committee by Ben Orzeske of the Uniform Law Commission. He was told that the written testimony has been made available to the Judiciary Committee, and he would be happy to answer any questions. 2:27:06 PM REPRESENTATIVE GRUENBERG said nobody on this committee sits on the Labor and Commerce Committee, and he asked if Mr. Gallanis could briefly describe the problem that the uniform act addresses and how it addresses it, then the committee will know what he has done and why HB 60 is important. MR. GALLANIS said that over that last few decades there has been growth in the "non-probate revolution," which is the ability of people to easily and thriftily transfer their property to named beneficiaries outside of the probate process. The non-probate revolution has historically focused on personal property. For example, bank accounts now have a pay-on-death feature, and there are securities registered in transfer-on-death (TOD) form. Those are non-probate transfers, he stated. Citizens across the country routinely take advantage of this trend to pass money and personal property to a named beneficiary outside of probate. The Uniform Real Property Transfer on Death Act would allow Alaska residents to similarly transfer real property to a named beneficiary at the time of the owner's death. This idea of a transfer-on-death deed has been around for some time, he said, and Missouri, in 1989, became the first state to allow such deeds. 2:29:16 PM MR. GALLANIS said five states allowed it by 2002, and the Uniform Law Commission then began to study the issue. The Real Property Transfer on Death Act was completed by the commission in 2009, and 23 states now have the uniform act or similar legislation. 2:30:03 PM REPRESENTATIVE GRUENBERG asked if the latest state to pass legislation is South Dakota, and that three other states, including Alaska, are considering the issue. MR. GALLANIS said that the two states recently considering the legislation, Washington and West Virginia, have enacted it. In response to Representative Gruenberg, he explained the process in that a person owning property would execute a deed, and the deed would comply with all of the standard requirements for a legally reportable deed, but the deed would name a beneficiary who would not have any interest in the property until the owner died. The deed will operate analogously to a will or a pay-on- death bank account. The deed, in effect, lies dormant while the owner is alive, but it operates efficiently and outside of probate at the owner's death to transfer the property to the beneficiary. 2:32:20 PM REPRESENTATIVE GRUENBERG noted that page 3 [of the bill] says that the deed must state that it occurs at the person's death, and it identifies the person specifically. He asked, "What do you do with the deed and how does it operate?" MR. GALLANIS said the deed is recorded, but unlike a standard inter-vivos deed, which operates to transfer ownership during the owner's lifetime, this transfer operates at death. 2:33:10 PM REPRESENTATIVE GRUENBERG asked if a person can revoke or renounce the deed. MR. GALLANIS said absolutely. These transfer-on-death deeds, like pay-on-death designations for a bank account, have the two principle features of wills: they are both fully revocable during the owner's life and they are ambulatory. The uniform act lays out multiple ways in which the deed can be revoked, and one way is to record a subsequent deed, which will revoke the prior deed, and another way is to file an instrument of revocation. If the owner sells the property to another person, that revokes the transfer-on-death deed. 2:35:05 PM REPRESENTATIVE GRUENBERG asked about a non-recorded will that will not be effective. MR. GALLANIS said, "We very much want information about the property to be in the chain of title, and therefore simply executing a will that sends 123 Main Street to a different beneficiary does not operate to revoke the transfer-on-death deed." 2:35:56 PM REPRESENTATIVE GRUENBERG said the key is that it must be recorded, so anyone can look quickly and see if the deed is still valid. MR. GALLANIS agreed. He added that during the drafting of the uniform act, there was significant help from the estate planning and real property sections of the bar and from a title insurance and banking representative. "They really helped us think through all of the issues to make sure that there would not be [indecipherable] on title," he said. CHAIR KELLER said that the committee is not going to move the bill today, and it will be set aside at 2:45. MR. GALLANIS responded to a question and said that in the uniform act there is both a suggested form for the transfer-on- death deed and a suggested form for the instrument of revocation. He noted that he has not looked at the Alaska version of the bill to know what forms are included. 2:37:50 PM CHAIR KELLER said both forms are in the latest version of the bill. He asked what happens when someone is acting on behalf of an owner and what complications are there when someone has the power of attorney. 2:39:15 PM BENJAMIN ORZESKE, Legislative Council, Uniform Acts on Real Property, Trusts, and Estates, Uniform Law Commission, said the act requires the owners of the property to act personally, and they must have the capacity to act for themselves. If a person does not have the capacity to execute a will, that person cannot execute a transfer-on-death deed, he explained, and the deed must be recorded in public lands records before the owner's death, he added. Unless a power-of-attorney specifically says that it allows the agent to act on behalf of the principal to change beneficiary designations or to dispose of a specific parcel of real property, under most power-of-attorney statutes the agent would not be permitted to execute one of these deeds on behalf of the principal who granted that authority. 2:41:36 PM REPRESENTATIVE GRUENBERG said the bill addresses that on page 4: If a recorded power-of-attorney or the transfer-on- death deed expressly grants a designated agent of the transfer or the power to revoke a transfer-on-death deed, the designated agent may revoke the transfer-on- death deed as provided in this section. 2:42:55 PM BRANDON CINTULA, Alaska Trust Company, said he supports HB 60 for all Alaskans. [Testimony was cut off due to audio problems.] 2:44:33 PM MARIE DARLIN, Alaska Commission on Aging, said the Alaska Commission on Aging has supported this legislation from the very beginning. She noted her written testimony that contains additional information. The bill takes care of a lot of problems, she stated, and the Alaska Commission on Aging fully supports the bill and has tried to work with those involved. She added that AARP has been involved as well, and this is something that has been needed for a long time. 2:47:06 PM CHAIR KELLER set HB 60 aside.