WALTEMATH LAW OFFICE

Beneficiary Deeds

To create a beneficiary deed, the property owner names one or more grantee-beneficiaries to become the owner(s) of the property at their death.  A provision in the deed advises the county assessor that the owner, not the grantee-beneficiary, is to continue to receive tax notices.  The owner remains responsible for the property until their death.  If the owner names multiple grantees and one predeceases the owner, the surviving grantee-beneficiaries will receive the deceased beneficiary share.  The predeceased grantee and his or her heirs receive no part of the home.

            A beneficiary deed must be completed and recorded with the county clerk and recorder, in the county where the property is located before your death to be effective.  It can be revoked, or canceled by you at any time before your death by recording a separate revocation form or recording a new beneficiary deed naming different grantee-beneficiaries. A contrary disposition in a will is not effective to revoke a beneficiary deed.   If you create a beneficiary deed and later decide you want to sell your home, the beneficiary deed is automatically revoked upon the recordation of the deed to the buyer.   A beneficiary deed allows the owner to maintain lifetime control of their property because they can revoke the deed and or change the beneficiary designation, prior to their death. If you apply for Medicaid, the Department of Social Services will require that you revoke the beneficiary deed to become eligible to receive Medicaid so that they may file a lien on your home for the services they provided to the Medicaid recipient.

A beneficiary deed creates a mechanism for protection from your creditors after your death, but it does not allow your estate to escape all creditors.  Although the transfer of your property is effective at death, and title passes, the property remains unmarketable for a four month period after death.  This allows anyone who has an interest in the property an opportunity to record notice of their interest in the property in the county real estate records.  The grantee-beneficiary takes subject to any preexisting encumbrances or other interests granted by the owner.  In addition, a grantee-beneficiary remains liable to the probate estate for up to one year after the death of the owner if the probate estate is insufficient to pay all claims and/ or allowances.

            A beneficiary deed can be a very useful, low cost method of transferring real estate upon your death, but your other assets must be taken into consideration to evaluate if this method of transferring title to your home after your death is right for you.  An estate planning attorney can advise you on whether or not this tool would work for you.