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Beneficiary Deeds may help you avoid probate.

Forbes Advisor asked nearly two dozen financial and real estate experts whether a primary residence was a good investment. Several of the respondents, 57%, said that buying a house is a good investment, while 38% said it depends on certain factors.  The remaining 5% indicated that buying a home is not a sound investment. For many, the return on investment is not paramount to the buying decision although it may be their largest investment.


In the estate planning process, there are many options to leaving a large investment like your primary residence to others. For instance, you may choose to bequeath your home to others in your Last Will & Testament. Still other homeowners may choose to create a Trust and fund it with their home and other assets. Another option gaining popularity in Missouri is the use of a beneficiary deed. This article seeks to discuss beneficiary deeds, how they work, and other topics that may help you decide that this nonprobate transfer vehicle should be part of your estate plan.


Every week, clients approach our firm in Jefferson City looking for ways to avoid probate such as those set forth in Section 461.001 RSMo., where Missouri law lists several transfers on death and nonprobate transfer provisions deemed nontestamentary. Most clients do not care about the process or the means to an end. Instead, they almost universally express their ardent desire to find ways to pass assets to loved ones without the delay and expense of probate administration.  For most of those who inquire and who do not have a Trust, I suggest they consider implementing a beneficiary deed as part of the process. After reading this article, I suspect you will conclude the cost is so remarkably reasonable and the benefits are so remarkably great, that you will kick yourself for not having one on file already.


Chapter 461.025 of the Missouri Revised Statutes provides for the creation of a beneficiary deed; more specifically, The Missouri Nonprobate Transfers Law as set forth in Chapter 461.003 – 461.081 of the Missouri Revised Statutes allows an owner of real property located in the State of Missouri the ability to avoid the probate process for such real property by creating and recording a beneficiary deed.   A beneficiary deed transfers ownership in real property to a grantee or multiple grantees when the last owner dies. Similar to the use of a Payable on Death procedure for bank accounts or the Transfer on Death procedure for titled personal property, the use of a beneficiary deed is an effective way to avoid probate of your home, which for most Missouri residents is, and will be, the largest asset they own.


Loans and liens must still be satisfied:  Now, the use of a beneficiary deed will not allow your heirs to receive your real property free and clear of mortgages and liens because beneficiary deeds are not bankruptcy tools. Instead, grantees take ownership of the property subject to all then existing loans and liens and must satisfy or pay those obligations in order to enjoy free and marketable title to the property.  In plain terms, if the grantees want to keep the premises after your death, they continue to pay the existing obligations you incurred while you owned the premises, or they can refinance the loans if the lender so requires. If they merely want to cash out, they sell the premises, pay off any mortgages and liens at closing, and then enjoy their net cash benefit from your estate.

Beneficiaries are not required to pay consideration for the property:  Both Sections 461.009 and 461.025.1 RSMo., indicate that no consideration must be paid by any grantee for a beneficiary deed to be effective. Moreover, the grantee need not know about the beneficiary deed or be provided a copy of the deed for it to be effective.

Disinherited parties may not attack the nonprobate transfer:  Section 461.059.1 RSMo., specifically reads that “No law intended to protect a spouse of child from unintentional disinheritance by the will of a testator shall apply to a nonprobate transfer.”  In summary, if not provided for in a will, a disinherited party may not challenge the intent of the beneficiary deed.

The beneficiaries/grantees are anyone of your choosing:  Beneficiaries or grantees within the beneficiary deed can be anyone of your choosing; they are not required to be relatives. If you and your spouse want your two grown children to inherit your home upon the second of you to die, a beneficiary deed is the perfect way to do so. If you want to leave everything to your children but for your home, you file a beneficiary deed listing others as beneficiaries and the home is generally not included in your probate estate inventory and appraisement or subject to court order.

When do beneficiary deeds transfer the property:  Your named beneficiaries take ownership of the property upon the death of a sole owner, or the death of the last surviving of multiple owners. For example, you own a home with your spouse, and you create and file a beneficiary deed while she is alive. She then predeceases you, but the home remains yours until you die. Upon your passing, if the beneficiary deed remains unchanged and on file, the home instantaneously transfers to your grantees when you die. While alive, any owner can revoke or amend a beneficiary deed. Moreover, the interest given to a beneficiary deed is not vested until the last owner dies so grantees are not free to market their share in the premises to others or lien their interest by taking out a loan. Although not required by law it is a good idea that each grantee create, sign, and record an Affidavit As To Death of Grantor with the same County Recorder of Deeds where the beneficiary deed was recorded.  By recording this sworn statement, it normally causes the recorder of deeds to note transfer and allow them to update the local tax roll. The need for the sworn statement arises more often when the grantee seeks to sell the premises.

What are the costs of a beneficiary deed:  Again, no money must be exchanged between the grantor and grantee as a beneficiary deed is not evidence of a purchase. Most reputable law firms charge less than $300 for such a deed and the cost to record the deed is normally $30 or less thereafter.

What are the risks of using beneficiary deeds:  The risks in creating a beneficiary are very few. Each deed must be recorded prior to the death of the grantor(s), or they are void. Beneficiary deeds must be drafted properly so professional advice and counseling with an attorney is strongly suggested. Poorly drafted beneficiary deeds may fail after the owner dies so the one bite at the apple concept is definitely at play.  When you convey a property to multiple parties, sometimes those multiple grantees disagree about how to dispose of or use the premises going forward. In rare instances, those contested parties must file a quiet title action or partition in order to separate their contested business interests.  Finally, if the premises are given to a married grantee, his or her spouse will likely be involved in any subsequent sale of the property.  Those unfortunate recipient grantees with nasty spouses may be better served to receive your property through use of a revocable trust with protective conditions removing the spouse from enjoying any interest in the property whatsoever.

Todd Miller is a monthly contributor and regularly writes and speaks on various legal topics including bankruptcy, estate planning, probate, and elder law.  He formed the Law Office of Todd Miller, LLC, 1305 Southwest Blvd., Ste. A, Jefferson City, Missouri in 2006.  He has been awarded the Substantial Contributor Attorney Award by the Missouri Bar and ranked as one of the “Top Attorneys in Missouri” by The Legal Network.  Mr. Miller earned his juris doctorate degree from the University of Missouri School of Law in 1999 and graduated with honors from Lincoln University in 1991.  You may find him at www.toddmillerlaw.com (573) 634-2838 or on Facebook, Instagram, and Twitter.