The Great Beneficiary Deed… And Why You May Want One

Beneficiary Deeds, also known as Transfer on Death Deeds, are awesome legal tools. Unfortunately, too many people are unaware they exist or how to use them. Today, we’re going to explore the beneficiary deed, its use, and a new program we’re rolling out to make it easier to get yours.

What is a Beneficiary Deed

Simply put, a Beneficiary Deed lets you transfer your home or land (real property) to someone after you die. You can find the law in Chapter 461 of the Missouri Revisor of Statutes. As you might guess, a couple requirements must be met in order for these deeds to be effective.

First, a Beneficiary Deed must meet all the standard legal requirements for a “good” deed transfer. These include things like:

1. The name and address of the current owner (aka Grantor(s))
2. The name and address of the beneficiary (aka Grantee(s))
3. The title and date of the document
4. The full legal description of the property
5. The Grantor’s signature, witnessed by a Notary
6. Other legal and formality requirements as necessary

Second, the deed must be recorded prior to the death of the owner(s). This is a very important point. Failing to properly record the deed in the County where the real property is located will make it inoperable.

Now you know what a Beneficiary Deed is, let’s take a look at some of the great ways we can use them.

The Great Beneficiary Deed

Why in the world would you want to create a Beneficiary Deed? Well, let’s look at some of the ways we use it in our planning and the benefits of doing so.

Avoid Probate.

One of the most important reasons for creating a transfer on death deed, is to avoid probate. Yes, if your deed meets all the legal requirements, then your real property will transfer to your designated beneficiary(ies) without going through probate. This is a massive benefit. First, you eliminate a lengthy process for one of your biggest assets. Second, you save your estate a large expense. Take a look at the compensation schedule for probate and consider the value of your real property. A $250,000.00 estate will result in fees of approximately $7,425.00 to both your executor and the attorney. That’s nearly $15,000.00 in fees alone.

Maintain.

When you add a Beneficiary Deed to your real property, it does nothing to change the current ownership, rights, or responsibilities of the current owners. In other words, it has no impact on you (until your death). You’ll be able to refinance, take out a home equity loan, and sell your real property without any problems. Also, most of the time, these deeds are completely revokable during your lifetime.

Control.

The beneficiaries of your estate, unless you have a formal estate plan in place, are regulated by state law. This means, upon your death, you have no control over who receives the assets going through your estate. The Beneficiary Deed gives you the power to designate one or more beneficiaries to receive your real property.

In Conjunction With a Full Estate Plan.

The Beneficiary Deed is a wonderful tool that we routinely use with our estate planning clients. For some, a simple Last Will & Testament, along with a Beneficiary Deed, will suffice. However, we frequently use Beneficiary Deeds and gift real property to a revocable living trust. By transferring the real property to a trust, we can avoid one of the biggest problems we encounter with real property. Namely, co-ownership. When your heirs inherit the real property, they may have different views on what to do with it. By moving it into a trust, you can designate one “decision maker” and limit the risk of costly legal battles.

Getting Your Beneficiary Deed Just Became a Lot Easier

We recommend and use Beneficiary Deeds in a lot of the estate plans we create for clients. However, we also know a lot of people have not quite gotten around to doing their estate plans. (shameless push… stop waiting!) In an effort to make it easier for the latter to get a Beneficiary Deed, we’re going to be rolling out a new service program. Starting in November, or maybe a little sooner, we will be offering the following Beneficiary Deed Packages.

1. Document Preparation Only. This package will offer no legal advice or strategy. Customers will be able to fill out an easy form, submit it, and receive a pdf Beneficiary Deed back via email. They will be responsible for printing, signing with a notary, and recording the document with the recorder of deeds in the county the real property is located.
2. Document Preparation and 30-minute Telephone Consult. Will include all of the above and a 30-minute phone consult to review the customer’s information and decisions. The customer will still be required to sign and record the document on their own.
3. Full Beneficiary Deed Package. This package will include an initial 30-minute phone consult, preparation of the deed based on client’s wishes, a 30-minute in office visit to sign the documents, and we will Record the deed on behalf of the client.

Our goal is to have these packages live on the Welch Law website by November 1, 2019. At that time, we will publish all the terms and conditions, fees, and forms for our visitors.

Conclusion

Beneficiary Deeds are amazing legal tools that benefit nearly every home, or land, owner in the state of Missouri. We are fortunate to live in a state that allows these types of transfers (about half of the states do not). Unfortunately, many people are unaware of the tool, or have simply failed to implement it. Our primary hope is that this article brings about awareness of how these deeds can be used. Secondarily, we hope it incites others to action. If you are in the latter category, and we can be of assistance, get in touch with us here.