If you have ever faced the challenge of probate following the death of a loved one, you know the process can be time-consuming and costly.
But did you know that a Beneficiary Deed can take your real estate out of the probate process, greatly simplifying your responsibilities as estate administrator?
How Does a Beneficiary Deed Work?
A Beneficiary Deed transfers the property owner’s real property to his or her heirs (“beneficiaries”) without probate. By law, ownership transfers immediately upon death to the beneficiaries named in the deed.
Because the property is not part of the deceased owner’s probated estate, the cost and delays of probate can be avoided. One word of caution: the property generally remains part of the deceased’s estate for tax purposes. Gift taxes may not apply, since the Beneficiary Deed is not a present transfer of property.
When a Trust is a Better Choice
So, is the Beneficiary Deed your best choice in all scenarios? While it is certainly less costly and less complex than creating a trust, the trust may prove to be more desirable in certain situations; such as when:
- the beneficiary is a minor
- multiple beneficiaries will own undivided interests in the property
- property is owned as joint tenants with right of survivorship
- the beneficiary has special needs that are provided for by government programs, such as Medicaid
In addition to the classic Revocable Living Trust, you may want to consider a Missouri Asset Protection Trust or several other irrevocable trust options which may make sense in your situation.
As with all laws, states vary in their governance of beneficiary deeds. In Missouri and Illinois, the knowledgeable attorneys of Quinn Estate & Elder Law are available to answer your questions about beneficiary deeds, as well as wills, trusts and estate planning, asset protection planning, guardianships and conservatorships, and much more, to help you avoid the unwanted hassle of probate and capital gains taxation.