What Do I Do When the Beneficiary in a Deed of Trust Dies?

Full Question:

Our family trust is co- owner of a trust deed that is ready to pay off. Some of the beneficiaries in the assignment of deed of trust have passed away. How is this handled in the reconveyance?
11/02/2009   |   Category: Trusts   |   State: California   |   #19425

Answer:

The answer will depend on the terms of the trust for distribution after death and all the facts involved. For example, in California in a deed of trust where the beneficiary is deceased, 40 days have passed since death, the gross value of the decedent's property in California does not exceed $100,000, and no probate has been filed in California, the successor must record an affidavit stating that the statutory requirements have been satisfied.

Please see the following CA statute:


13106.5. (a) If the particular item of property transferred under
this chapter is a debt or other obligation secured by a lien on real
property and the instrument creating the lien has been recorded in
the office of the county recorder of the county where the real
property is located, the affidavit or declaration described in
Section 13101 shall be recorded in the office of the county recorder
of that county and, in addition to the contents required by Section
13101, shall include both of the following:
(1) The recording reference of the instrument creating the lien.
(2) A notary public's certificate of acknowledgment identifying
each person executing the affidavit or declaration.
(b) The transfer under this chapter of the debt or obligation
secured by a lien on real property has the same effect as would be
given to an assignment of the right to collect the debt or enforce
the obligation. The recording of the affidavit or declaration under
subdivision (a) shall be given the same effect as is given under
Sections 2934 and 2935 of the Civil Code to recording an assignment
of a mortgage and an assignment of the beneficial interest under a
deed of trust.
(c) If a deed of trust upon the real property was given to secure
the debt and the requirements of subdivision (a) and of Sections
13100 to 13103, inclusive, are satisfied:
(1) The trustee under the deed of trust may rely in good faith on
the statements made in the affidavit or declaration and has no duty
to inquire into the truth of any statement in the affidavit or
declaration.
(2) A person acting in good faith and for a valuable consideration
may rely upon a recorded reconveyance of the trustee under the deed
of trust.
(d) If a mortgage upon the real property was given to secure the
debt and the requirements of subdivision (a) and of Sections 13100 to
13103, inclusive, are satisfied, a person acting in good faith and
for a valuable consideration may rely upon a recorded discharge of
the mortgage executed by the person or persons executing the
affidavit or declaration as successor of the decedent or by their
successors in interest.

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