You have many options to consider when developing a great plan for how your property will be distributed after your death. Your attorney may suggest including certain provisions in your Will or creating and funding a trust.
Another suggestion may be to use a deed to transfer property to your heirs. Most deeds transfer property right now. A beneficiary deed, or transfer-on-death deeddoes just what its name implies — transfers the property to a beneficiary only upon your death. As grantor of the property, you retain ownership and control of the property during your lifetime and can revoke it anytime.
Sound like depressing way to transfer property? In some situations, there are very positive reasons to use a beneficiary deed. A beneficiary deed might be the perfect way to transfer property to your heirs — or not. A thorough discussion with a qualified Arizona estate planning attorney will help you decide if this is the right path for you. At Keystone Law, Francisco Sirvent assists people with their legal questions every day.
I then entered the legal profession as a law clerk in and pursued a law degree at Arizona State University, completing the degree in as one of a handful of students who also obtained a Certificate in Law, Science and Technology. Skip to content. Property transferred by a beneficiary deed does not need to go through probate. After the death of the grantor, it is relatively easy to transfer the property to the beneficiary or beneficiaries.
Lower fees. Using a beneficiary deed may reduce or eliminate fees for probating the estate or managing a trust. Liens and loans. After a beneficiary deed is signed, grantors may still do what they want with the property, including selling it or mortgaging it. A beneficiary deed does not remove liens currently on the property when property is transferred to the heir. Property transferred may be taxed. No asset protection. The beneficiary receives the property without protection from creditors, divorces, and lawsuits.
Medicaid eligibility.Learn something new every day More Info A beneficiary deed is commonly associated with real estate and property because it is a document used to determine who will receive real estate property when the original owner dies. Those who receive the property as the result of the beneficiary deed are referred to as beneficiaries.
This document is important because it allows for a smooth flow between past and present owners, without a long waiting period for probate. A beneficiary deed is completed before the original owner passes away.
He or she is still legally allowed to live on the property and can refinance it. The original owner can also rent out rooms for living space or office space. Essentially, the original owner can do whatever he or she pleases with the property until the time of his or her death, without the permission of the beneficiary. The legal aspects of beneficiary deeds vary from state to state. In Missouri, for example, the potential beneficiary is required to obtain spousal approval before he or she can be added to the deed.
The spouse must present written consent to the transfer of property. In addition, the spouse is entitled to ask for half of the property as payment for signing the transfer allowing the deed to be completed. In Colorado, the laws regarding beneficiary deeds are slightly different.
First, an affidavit is required in order to avoid a full probate process with the beneficiary deed. Colorado law also states that beneficiary deeds must be recorded before the death of the owner. While the original owner is still alive, he or she can re-direct the beneficiary deed to someone other than the original beneficiary.
In order for the new beneficiary to be recognized, however, the original owner needs to obtain a recorded revocation before creating a new deed. Can a beneficiary deed be done on a property with a lien on it? Is this correct? What other options to I have if I want to spare my next of kin all the probate hassle? We have completed a beneficiary deed to our children.
After reading some others comments, do the kids have to pay taxes on forms others say they received, or what about Medicare, if they later claim they needs monies from the home due to services received?Simply scribbling your beneficiary's name on the deed to your house won't make her the house's co-owner. If you want to change or add names on a deed, you have to make out a new deed to record the change of ownership. Making your beneficiary the co-owner is one way to do it, but doing so has many drawbacks.
A simpler way to transfer title is to draw up a beneficiary or transfer-on-death TOD deed that transfers the title as soon as you die. Buy a beneficiary deed from a legal-forms store in your state or a website that sells forms. Each state sets its own requirements for deeds — the format, language, and notarization requirements — and not following the rules will invalidate the deed.
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Research state law to find out any other requirements for TOD deeds, such as whether you need a witness present when you sign it. Write the legal description of the property in the deed. The street address alone isn't enough: You have to use the platting or boundaries recorded in the county files to mark the exact location of the property.
The easiest way to do this is to look at your own deed for the property and copy the description, exactly, onto the TOD deed. Name the beneficiary who inherits the property. It's important to write your heir's name down rather than "my son" or "my granddaughter" — the lack of a specific name could invalidate the deed or confuse the executor who manages your estate.
It's okay to convey title to more than one person in a TOD deed, but only if you identify each beneficiary by name. Sign the deed and have it notarized and witnessed if necessary. Record the deed at your local county office to make it legal.
If you do everything right, when you die the title will transfer to your beneficiary without going through probate. A graduate of Oberlin College, Fraser Sherman began writing in Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history.
Tips If you co-own the house as a joint tenancy with a right of survivorship or tenancy by the entireties, your share passes automatically to your co-owner when you die.
You don't have to do anything to make that happen. With a beneficiary deed, your heir takes title subject to any existing mortgage or other claims on the house. Your lender may ask the beneficiary to pay off the mortgage immediately. That may require selling the house or taking out a new mortgage.
Warnings If you give your beneficiary shared title to the house while you're alive, you may regret it. As co-owner, he could sell off his share of the house, or his creditors or a divorcing spouse could try to take it. TOD deeds eliminate that possibility. If you already co-own the house, the beneficiary deed can only transfer your share of the property.
To ensure the title transfer goes smoothly after your death, you and your co-owner should both sign the beneficiary deed. Video of the Day. Brought to you by Sapling. How to Fill Out a Deed of Reconveyance. How to Get a Name Off a Deed. How to Search for Mineral Rights Records. Property Transfer Procedures. What Is a Grant Deed?Technically, a mortgage doesn't have a trustee or a beneficiary.
Another type of document for mortgage loans does, however. It's called a deed of trust and it's similar to a mortgage, unless and until you default on the loan. Fourteen states use deeds of trust rather than mortgages. The trustee of a deed of trust isn't involved in the exchange of funds so you can buy your house. That's between your home's seller and your mortgage lender when the lender makes you the loan.
You then sign the deed of trust, promising to pay the loan back. The trustee's role is to make sure you do. The trustee is usually a professional entity, such as an escrow company or a title company, not an individual.
It takes possession of the title to your home and holds on to it for safekeeping until you fulfill the terms of the loan agreement and pay the property off. The beneficiary of a deed of trust is your lender. With a traditional mortgage, the lender would act as watchdog over your payments itself, ensuring that you make them on time and beginning foreclosure proceedings if you don't.
With a deed of trust, the beneficiary effectively entrusts the the dirty work — the job of foreclosure — to the trustee. You — or the person who borrowed the money from the lender — are the trustor of a deed of trust.
The deed places your home in your care and control. You get to live there as long as you make the loan payments and you're responsible for its upkeep and repair, just as you would be with a mortgage. When you pay your loan off, the trustee will reconvey title to the home to you and you own it, but in the interim, the trustee holds title. The trustee is something of a silent partner in the whole transaction unless or until you default. If you do, the beneficiary can send you a notice of foreclosure and sic the trustee on you without going to court to get a judge's permission first.
This is a so-called non-judicial foreclosure. You'll have a short period of time to bring your loan payments current. If you fail to do so, the trustee can auction off your home. If this occurs, the trustee turns title to the property — as well as the money from the sale — back to the beneficiary or lender. This is both better and worse than a regular mortgage foreclosure. With a deed of trust, the lender can't sue you for the money if your home sells at auction for less than you owe.
However, the foreclosure is final. You have no period of time to redeem it or buy your home back after the sale, as you would if you had a mortgage instead of a deed of trust and the lender foreclosed through the judicial process. Beverly Bird has been writing professionally since She is the author of several novels including the bestselling "Comes the Rain" and "With Every Breath.
She covers many legal topics in her articles. The Trustee The trustee of a deed of trust isn't involved in the exchange of funds so you can buy your house. The Beneficiary The beneficiary of a deed of trust is your lender. The Trustor You — or the person who borrowed the money from the lender — are the trustor of a deed of trust. Defaults The trustee is something of a silent partner in the whole transaction unless or until you default.
Can You Deed Your House to Someone & Still Have the Loan in Your Name?
Video of the Day. Brought to you by Sapling.One distinctive feature of this useful estate planning tool is its flexibility. The grantor retains absolute ownership of and control over the Missouri real estate, with the freedom to sell, rent, mortgage, or otherwise use the land at will with no penalty for waste or obligation to inform the named beneficiary.
He or she may also change details about beneficiaries or even revoke the beneficiary deed outright by executing and recording a new document containing the updated information.
For the beneficiary deed and any related changes or revocations to be valid, however, the deed must be recorded during the grantor's lifetime. This flexibility is possible because the transfer of ownership is incomplete. There is no statutory obligation to notify grantees of their beneficiary status, so there is typically no consideration something of value, usually money paid for the potential future interest in the real estate.
The transfer of ownership rights is completed when the grantor dies and the beneficiary records the appropriate documentation. Overall, Missouri beneficiary deeds are a simple and effective estate planning tool for individuals who want to pass on real property rights outside of the probate process. Even so, it is essential to review how executing a beneficiary deed might impact taxes, as well as eligibility for local, state, and federal benefits and asset-based programs.
Rafael R. It was easier than I expected.
What is a Beneficiary Deed?
Do It Yourself Legal Forms available on our Website are not guaranteed to be usable, correct, up to date, or fit for any legal purpose. Nothing on this website should be considered a substitute for the advice of an attorney.
Very simple and efficient navigating the site. Reply from Staff: Thank you for your feedback. We really appreciate it. Have a great day! Audrey A. Reply from Staff: Thank you! Robert H. Victoria Y. Very easy to use Reply from Staff: Thank you for your feedback.A beneficiary deed is a certain type of real property deed which is used to transfer property.
But the interest in real property does not take effect until the death of the owner, after which the interest automatically transfers to the designated individual or entity which is named in the beneficiary deed.
Beneficiary deeds have certain advantages compared to the other ways for transferring real property at death. Among the major ones are:. A beneficiary deed is also less complex and expensive than setting up a trust.
However, a trust may still be desirable in certain types of situations such as:. The level of capacity which is needed to make a beneficiary deed is similar to the level of capacity which is needed to make a will. The particular laws on beneficiary deeds can vary state by state so it is important to consult the relevant local laws.
If you need help with a beneficiary deed, it would be beneficial to consult with a local real estate attorney before proceeding. Ken joined LegalMatch in January Since arriving, Ken has worked with a wide assortment of talented lawyers, paralegals, and law students to grow LegalMatch's Law Library into a comprehensive source of legal information, written in a way that is accessible to everyone.
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Pros & Cons Of Using A Beneficiary Deed
Purchase and Sale of Residence. Construction Disputes. Title and Boundary Disputes. Landlord and Tenant. Zoning, Planning and Land Use. Please provide a valid Zip Code or City and choose a category. Please choose a category from the list. Please select a city from the list and choose a category. Please enter a valid zip code or city. Please select a city from the list.If your mortgage has a trustee, it probably isn't a mortgage. While the term "mortgage" gets used casually to refer to a home loan, it's actually a technical legal term.
In some states, a mortgage is the document that lets your lender take your property in foreclosure. In others, a trust deed is used in place of a mortgage. When you take out a loan in a trust deed state, you sign two documents. Your loan agreement is called a promissory note and specifies how you pay your lender back.
At the same time, you also sign a second document called a trust deed that gets recorded against your property's title. The trust deed puts the actual ownership of your home in a state of limbo. Eventually, you'll get the ownership for your property if you pay your loan, but if you don't pay your loan, the ownership crosses over to the bank's hands.
The mechanism by which your home's title is held in limbo is a trust.Transfer Property Title after Death - Wills and Trusts
The person who controls the trust is called a trustee, and you're the trustor since you put your house into the trust. Trustees are usually title companies and, in most loans, don't do anything. However, they have the power to take your title and give it to your lender if you don't make your loan payments.
In a trust deed, the lender is called a beneficiary. Since you'd probably rather not have to give up your property if you don't pay on it, you don't really benefit from the trust.
For the trustee, it's a responsibility. Your lender, on the other hand, doesn't give anything up by being name in the trust, since it already gave up its money in the separate promissory note, and may get your house out of the deal. It benefits, so it's the beneficiary.
Mortgages are similar to trust deeds, but they don't have a trust in the middle. In a mortgage, you put your lender on the title of the property with you. As long as you pay your loan, the lender just sits there.
If you don't pay, though, the mortgage gives it the right to foreclose and take the ownership of your property.
Instead of having a beneficiary, trustee and trustor, mortgages have lenders and borrowers or, technically, mortgagees and mortgagors. In a mortgage, you're the mortgagor since you are actually giving the bank a mortgage interest in your property.