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Beneficiary Deeds

Beneficiary Deeds

Table of Contents

By Jeff Wagoner, W M Law President

The main reason to have a revocable trust is to avoid probate.  But, did you know that many, actually probably “most”, people don’t really need a revocable trust if their family situation is relatively simple and they make good use of “non-probate transfer mechanisms.”

A non-probate transfer mechanism is simply a way to change the title on a piece of property without getting an order of the probate court.  A simple example is using a “Payable on Death” designation on your checking account.  If you have listed someone as a “Payable on Death” (aka “POD”) beneficiary on your checking account, then the bank will automatically give the money in that account to your POD beneficiary once that person presents your death certificate to the bank.

It is super simple – no need for lawyers or courts.  A great tool for transferring real estate that is just as simple is known as a “Beneficiary Deed.”  A Beneficiary Deed is essentially just like a POD designation on a bank account, with the exception that it is for real estate.  It is a little more complicated because you’ll want an attorney to draft that Beneficiary Deed for you, and maybe even to file it for you in the real estate record in your county.

Be careful, because if you are a “do-it-yourselfer” type and forget to file the Beneficiary Deed with the county recorder or register of deeds before the property owner dies, then the Beneficiary Deed is void – it must be recorded before death.

But, overall, Beneficiary Deeds are a simple and efficient way to transfer real estate immediately upon the owner’s death to the people the owner wishes to leave the property to.  Only 31 of the 50 states currently allow Beneficiary Deeds.  Thankfully, both Missouri and Kansas allow them.  As such, here at W M Law, we draft and file a lot of Beneficiary Deeds because they are wonderful, simple and low-cost tools to use in estate planning.