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The Thompson Law Group, P.C. is committed to providing quality legal service at reasonable rates. It is our hope that should a problem arise for a client, that we are able to resolve our client’s issue as quickly, cost-effectively, and as beneficially as possible.
Here are thoughts on avoiding your property going into probate.
Wondering what needs to be considered before deciding on using a beneficiary deed?
Here are considerations about using joint tenancy deeds.
Learn the ins and outs of including real property transfer in your trust.
• The cost of probate
• The time involved in probating the assets (property) of an estate; and
• The fact that probate proceedings are public information.
There are several options for avoiding probate. These include:
» Transfer of property by affidavit;
» Titling property so that it transfers automatically without probate; and
» Living trusts.
Advance planning is necessary for the second or third options for avoiding probate.
» Arizona law allows for the transfer of property in small estates through an affidavit procedure.
The availability of the procedure, among other things, depends largely on the size of the estate involved. The affidavit procedure is available for both real and personal property. For personal property, the affidavit procedure is not available until thirty days after the death of the decedent and for real property the affidavit procedure is not available until 6 months after the death of the decedent. The affidavit transferring any type of property must strictly comply with certain statutory requirements. Thompson Law Group, P.C. has assisted many clients with the preparation of affidavits transferring property in small estates.
A word of caution is necessary with respect to the use of joint tenancy deeds. Many people have come to Thompson Law Group, P.C. asking for the preparation of joint tenancy deeds. Frequently, they want to add a child to the title of their real property (make the child a “joint tenant”), for the purpose of avoiding probate and transferring the property to their child upon their death. A joint tenancy deed will make the child an equal owner of the property. While it is true that a joint tenancy deed will avoid probate, it is not the only means of doing so, and may have serious adverse tax consequences as well as legal ramifications prior to the property owner’s death. If property is transferred by will or by beneficiary deed, upon the death of the owner, the heir will get what is called a “step-up in tax basis”. This may result in the elimination of part or all of any income tax on the sale of the property. The use of a joint tenancy deed will not provide a step-up in tax basis, and therefore may result in substantial income taxes on the subsequent sale of the property that could have been avoided.
In addition to possible adverse tax consequences, the use of a joint tenancy deed places another person on the title to the property, and therefore the original owner cannot transfer, sell, mortgage, or rent the property without the consent of the other joint tenant. The credit history of the joint tenant may be considered in obtaining financing. Perhaps of even greater concern is that outstanding judgments or tax liens against the joint tenant that are recorded in the county where the property is located will attach to the title to the property as soon as the joint tenant is added to the title. This means that the joint tenant’s creditors may use the property (sell it) to pay any judgments or liens of the joint tenant.
While joint tenancy deeds are appropriate in some circumstances, Thompson Law Group, P.C. makes sure that its customers are advised of the potential disadvantages of joint tenancy, and the other options for transferring property and avoiding probate that are available to its clients.
Thompson Law Group, P.C. is committed to providing quality legal service at reasonable rates. We generally provide our documentation preparation services at a flat rate so that the fees are certain. If is necessary to provide additional services, such as review additional documents, chain the title, etc., in order to prepare the necessary documents or cure title defects, we inform clients of any additional expense prior to commencement of any work to avoid any confusion about fees or additional work to protect a client’s transaction and make it valid.
Once your trust has been created, it is very important that you transfer all your assets into your trust, or your trust will have no effect. Many people that have formed a trust themselves using general self-help forms do not actually transfer their property into the trust. If property intended to be in trust is not properly transferred, then it is as if the trust never existed at all and will have no legal effect. While we do not provide any assurance as to the legal validity of your trust, which you would need to have determined by your estate planning attorney, we do assure you that any transfers in or out of your trust comply with Arizona law. Transfers into or out of a trust in Arizona are far more complicated than average transfers and require certain disclosures pursuant to Arizona statutes. Again, we make sure that the transfer will not only comply with Arizona law but will satisfy the title company’s requirements for future insurability of the property, as well.
Thompson Law Group, P.C. is committed to providing quality legal service at reasonable rates. We generally provide our documentation preparation services at a flat rate so that the fees are certain. If is necessary to provide additional services, such as review additional documents, chain the title, etc., in order to prepare the necessary documents or cure title defects, we will inform you of this expense prior to the commencement of any such work.