What is a Beneficiary Deed?
A Beneficiary Deed is a type of legal document that transfers real property from an owner to a recipient. The person named in the deed to receive the property is called the “beneficiary”. Beneficiary deeds are different from other types of deeds in that they expressly indicate that the property is to be transferred only upon the death of the owner.
Thus, beneficiary deeds are similar to a will in that they only become enforceable after the owner’s death. However, beneficiary deeds usually address a specific property interest, whereas a will can cover the person’s entire estate. Thus, beneficiary deeds are advantageous in situations where a simpler transfer is desired.
What are the Characteristics of Beneficiary Deeds?
An owner of property has much freedom to transfer their property when utilizing a beneficiary deed. For example, the creator of the deed may:
- Transfer the property to a specifically named individual (such as “my granddaughter Jessie Smith)
- Transfer the property to several beneficiaries, who will usually then assume title as joint tenants with a right of survivorship
- Transfer real property such as a home, dwelling place, ranch, condos, etc.
- Transfer certain forms of person property that carry a title, such as cars, boats, airplanes, interests in minerals and natural resources, etc. (this may depend on the laws of the jurisdiction)
Since a beneficiary deed is not executed until the owner dies, this means that the property owner maintains control and ownership up until their death. As a result, beneficiary deeds may be cancelled or revoked at any time by the owner before their death.
What are the Requirements for a Beneficiary Deed to be Valid?
The requirements for a valid beneficiary deed may vary according to state laws. However, as in all transfers of land that are made during the owner’s lifetime, the deed needs to be in writing. In addition, most jurisdictions would require the following for a beneficiary deed to be valid:
- An identification of the person who is transferring the property interest in the deed
- An identification of the recipient(s) of the property, including their contact information (the “beneficiary”)
- Words indicating that the grantor intends to transfer the property (“I hereby grant title to my home to my granddaughter Jessie Smith upon my death”)
- A description of the property being conveyed (the property needs to be identifiable based on this description)
- Signatures of the relevant parties
Finally, the deed is not valid until it is delivered to the beneficiary and accepted by them. It should be recorded with the county register’s office, and notarized as well.
What if I Have a Dispute over a Beneficiary Deed?
Even though beneficiary deeds are somewhat less complex than a formal will, many disputes can arise regarding the conveyance. Some common disputes over beneficiary deeds may involve:
- Disputes over the identity of the beneficiary (for example, stating “my sister’s third-born child” may create difficulties; it’s better to also name the person specifically)
- Difficulties in identifying or determining the worth of the property to be conveyed
- Misunderstandings regarding the terms of the conveyance
- Third parties attempting to claim the property as their own
- Attempts to make a transfer that is illegal or prohibited by law
As you might be able to tell, many of the disputes over beneficiary deeds have to do with poorly-written deed documents. Such disputes can definitely be prevented through carefully drafting the deed in a way that is clear and precise. There should be no questions as to any of the terms, properties, parties, or information contained in the deed.
Thus it is usually necessary to hire a lawyer to help draft or review the legal documents before they are signed.
Disputes over beneficiary deeds can be resolved in a court of law if the parties are unable to reach a mutual agreement. While this can sometimes be time-consuming, it is better to resolve the matters in person rather than having the property pass through the state probate process (this might not always yield favorable distribution results).
Do I Need a Lawyer for Questions Regarding a Beneficiary Deed?
Beneficiary deeds are a good way to transfer a specific piece of property without having to alter or change an existing will. If you need help with a beneficiary deed, or representation in court, a competent attorney can help provide you with services in your area. Laws covering beneficiary deeds will vary by state.
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Last Modified: 02-02-2012 02:41 PM PST