REAL PROPERTY SERVICES   |   Beneficiary Deeds

Does a beneficiary deed need to be set up by an attorney?

The beneficiary deed is a very useful tool for transferring a person’s home or other real property upon a person’s death, but as with other deeds, it should be prepared by a professional. A large part of business at Thompson Law Group, P.C. has been correcting titles to real property where deeds were incorrectly prepared. Deeds must correctly reflect marital status, and contain an accurate legal description. One of the most common defects in any transfer of real property via generic self-help forms is the failure to accurately state the legal description of the real property. Further, the generic self-help forms do not include the mandatory disclosures required by Arizona law when a trust is involved which may make the title transfer unenforceable and void. A beneficiary deed is in some respects more complicated than other deeds, because it must correctly reflect the beneficiary (the person receiving the property after the decedent’s death) and in what capacity. For example, if property is left to numerous children, will they obtain title as tenants in common? What happens if one of the children dies before the grantor of the beneficiary deed? Will grandchildren inherit if one of the children is deceased when the property is transferred? For a husband and wife, do they understand that a beneficiary deed for property held in community property with right of survivorship can be revoked by the surviving spouse, giving the surviving spouse the power to change who the property is ultimately transferred to upon death? These and other questions should be answered before preparation of a beneficiary deed. Just as in the case of a will or a living trust, the preparer of a beneficiary deed should make sure that it accurately reflects the desires of the person planning his or her estate.

Thompson Law Group

The 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 our clients of this expense prior to commencement of any work in avoid any confusion about fees or necessary work to protect a transaction and make it valid.

What are the advantages of using a beneficiary deed?

A beneficiary deed has several advantages over the other methods of avoiding probate with respect to the transfer of real property. The affidavit procedure is only available where the equity in the property is within the statutory limitation (currently $75,000.00), and it cannot be used until 6 months have passed from the date of death of the property owner. If the property is an asset of a living trust, the successor trustee must interpret the provisions of the trust and then have a deed prepared transferring the property to the beneficiaries named in the trust. When a beneficiary deed has been recorded and upon the subsequent recording of a death certificate, the real property transfers automatically to the beneficiary named in the beneficiary deed. Beneficiary deeds may be changed at any time prior to the death of the property owner and do not affect any tax or debt obligations of the beneficiary until the death of the property owner (grantor) since the beneficiary has no legal or equitable interest in the real property until the property owner dies. In short, the creditors of a beneficiary may not attempt to collect from the real property and there are no tax ramifications or other legal obligations to the beneficiary while the owner is alive.

Why should I use a beneficiary deed?

Arizona law allows the owner of real property to convey all their interest in real property to a designated beneficiary to be effective only upon the owner’s death. For many people, their home is their greatest asset, and they want to be able to transfer it to a certain person or persons in a simple, inexpensive means that avoids probate. A beneficiary deed will accomplish this transfer without the need of a formal probate.

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