A beneficiary deed means a deed, subject to revocation by the owner, which conveys an interest in real property. A “deed” means any instrument of conveyance (the legal transferring) of real property. Some states refer to a Beneficiary deed as a Transfer on Death or TOD deed. 

The essential difference of a beneficiary deed is that the transfer doesn’t take effect until your death. 

Why Would Someone Choose a Beneficiary Deed?

One appealing characteristic of a beneficiary deed is that it can protect your property from probate. Probate can result in a lengthy and costly process that family surviving family members must endure to access the assets you left to them.

You can change your mind and revoke a beneficiary deed, and they are relatively easy to create, making them appealing to some families.

Transferring the asset to the beneficiary is typically straightforward and can save the named beneficiaries time and money vs. going through probate.

In most cases, the beneficiary has no legal right to the property before your death. As such, some heirs don’t even need to be told of the deed. Alternate beneficiaries can also be named to be proactive in handling the event that the original beneficiary dies before the current owner.

What Does a Beneficiary Deed Look Like?

Similar to other real estate deeds, a beneficiary deed states the current owner, the designated beneficiary (and any alternate beneficiaries), and the exact legal description of the real property at stake. Additional stipulations are made within the document stating that the deed doesn’t take effect until the current owner dies.

How To Revoke a Beneficiary Deed

As life and families progress, sometimes changes are necessary. You have the right to revoke a beneficiary deed at any time. Often times you can draft a simple document revoking the beneficiary deed. You can have this document signed and notarized and file it with a local land records office in the same county where you filed the original beneficiary deed. 

As mentioned above, you can do this anytime before your death, and the current or new beneficiary doesn’t need to be notified. In most cases, the most current beneficiary deed will be upheld in the courts. However, it is still an important step to take to revoke the previous beneficiary deed if that is your intent to reduce confusion. By simply stating the change of beneficiary in a will or verbal agreement, the revocation may not be upheld. 

Items to Consider with a Beneficiary Deed

Joint tenancy applies to a beneficiary deed. What this means is that if one joint tenant executes a beneficiary deed and dies before the other joint tenant, the property will pass to the other joint party upon death.

Also, if you have debts that are not sufficiently satisfied otherwise, a beneficiary deed will not avoid debts owed. A creditor can potentially recover debts owed through the property’s market value referenced in the beneficiary deed via the beneficiary if necessary.

If you are concerned about eligibility for Medicaid, a beneficiary deed will disqualify you from this option. Remember that you can revoke the beneficiary deed at any time before death, so if you choose to create one and later on need to revoke it to qualify for Medicaid or other benefits, you generally will have that option. It can be of great help to designate a power of attorney that specifically addresses their ability to revoke a beneficiary deed if you cannot do so for yourself.

How is Ownership Transferred to the Beneficiary?

Upon the owner’s death, the beneficiary can record a sworn statement or affidavit and supply a copy of the death certificate to the county clerk at the recorder’s office. If the owner has chosen not to alert the beneficiary of the deed, this can create some timely issues for the surviving family members. Due to this, it may be in your best interest to alert the beneficiary after completing the deed. This way, they are aware of the impending transfer and can access your death certificate.

How Can an Experienced Attorney Help Me?

It can be a little unnerving to plan for our own deaths. It raises questions or concerns about our mortality that we may not yet be ready to face. What a comprehensive estate plan allows you to do, however, is continue your need to protect and prepare your family even long after your death. You have spent the better part of your life looking out for your family and building your legacy. You can continue those efforts even after your death with a carefully laid out estate plan.

In an already trying time, while they navigate the loss of you, they can avoid unnecessary stress and financial concerns by you having a well-constructed estate plan.

Our team has a unique skillset that allows us to cover a multitude of legal issues, and we have extensive experience in estate planning. Let our professional team shoulder your worries and provide a custom approach to your needs and wishes that will help provide ease of mind to your family for years to come.

Contact our office today at (303) 564-7313 to learn more about how we can specifically help you and your family. We take pride in becoming an extension of your advocacy and share your compassion and dedication to providing for your loved ones. We look forward to serving you to the best of our ability.