What Is A Beneficiary Deed?
A beneficiary deed is not a new form of ownership but rather, it provides for the transfer of property ownership to a beneficiary on the death of the current owner. A beneficiary deed can name any number of beneficiaries and can pass title to real property under any form recognized by Arizona law. Moreover, a beneficiary deed can contain a combination of multiple and successor beneficiaries, and can even be used to transfer property to a trust. In some circumstances, a beneficiary deed can be an effective means by which property can pass without a will or trust, and without the need for probate.
How Does A Beneficiary Deed Work?
A beneficiary deed works in Real Estate the way a "payable on death," or POD clause does for bank accounts. Meaning, the transfer is automatic upon death. It is not affected by one's will, so any contrary statement in the will does not override the beneficiary designation.
Additionally, a beneficiary deed is able to secure a future interest in land in a beneficiary, without using a joint tenancy deed which oftentimes becomes a hassle. In a joint tenancy, all the owners (joint tenants) hold a present ownership interest in the property. Whereas with a beneficiary deed, the beneficiary's interest does not become an interest until the death of the current owner. This is an added benefit for the current owner, because no one else can claim an interest in the property until his or her death when the beneficiary deed automatically transfers the interest to the beneficiary. Of course the beneficiary deed will need to be recorded, this is done by recording the death certificate along with an affidavit confirming the transfer to the beneficiary along with the deed. It should be noted, that once a beneficiary takes his or her property interest under a beneficiary deed, all present liens on the property are also transferred. This is the same for a joint tenancy deed.
In regards to a trust, a beneficiary deed can be used to transfer property automatically upon your death. Normally, when a trust is created, the property is placed in that trust immediately. The beneficiary deed allows more control over the property and has the added benefit of avoiding probate because the property transfers automatically.
Is A Beneficiary Deed For Me?
A beneficiary deed is not for everyone. Your personalized goals and circumstances as far as the property you wish to convey are important to consider before deciding on a beneficiary deed. Considering all options and understanding the outcomes of each choice is crucial before moving forward. Speaking with a knowledgeable attorney is where you will want to start. Any good attorney will be able to recognize if a beneficiary deed is in your best interest or not, and if not will provide you with alternate avenues.
Consult With An Experienced Attorney
To inquire about a beneficiary deed for your family property, please contact our firm Platt & Westby, P.C., online or call 602-277-4441 for a free initial consultation with one of our estate planning attorneys.