Thinking about your estate plan can be difficult, but having one is the best way to protect your assets, ensure that your wishes are followed, and keep things as simple as possible for your loved ones after your death. If you own your home, beneficiary deeds in Phoenix are an option for passing it on to your heirs. With multiple potentially complicated assets to think about, a local estate planning attorney can recommend the right tools and strategies for your situation.
What Is a Beneficiary Deed and Who Should Consider One?
Arizona Revised Statute § 33-405 allows homeowners to use beneficiary deeds to pass real estate down to their heirs upon their death. These are also sometimes called “transfer on death deeds.” The property owner remains in control of their home throughout their life, and if they choose to sell the property, they are free to do so and the beneficiary deed is cancelled. They can also cancel the deed at any time for any reason. Many homeowners appreciate this flexibility. Couples who jointly own their homes can also use these deeds, with the transfer happening after the second spouse’s death.
Using a beneficiary deed to transfer property is a relatively quick process that avoids probate. It is also typically easier and less expensive to set up than other estate planning tools like trusts. Beneficiary deeds are an especially good fit for people in Phoenix who own their home but do not have other assets, or only have assets like retirement accounts or life insurance policies that already have designated beneficiaries.
What Are the Downsides of Using a Beneficiary Deed?
For most people, a beneficiary deed is not a complete solution for estate planning since it only addresses the primary home. If the person has any other assets, they would need a will or trust to determine how to distribute them.
A beneficiary deed does not protect the property from creditors or from counting against Medicaid eligibility. It also does not help when the homeowner is incapacitated and must sell their home to pay for care, but is not able to do so on their own. If the beneficiary dies before the homeowner and the deed is not updated, the home does not become part of the beneficiary’s estate. For example, if the homeowner names their two adult children on the transfer deed and one dies before their parent, the deceased sibling’s portion of the home would go to the other sibling instead of the deceased sibling’s children.
Finally, a beneficiary deed in Phoenix does not control how the beneficiary uses the property. If a person’s children or other heirs are financially irresponsible, they could immediately sell the home and spend the proceeds. If a person wants to prevent this, a trust is typically a better fit for estate planning.
Discuss Whether a Beneficiary Deed Makes Sense for You With a Phoenix Attorney Now
Beneficiary deeds can be a great estate planning tool, especially if your home is your primary or only asset. Phoenix lawyer can examine your assets and goals and determine if a beneficiary deed works for you. Our team will set up your deed and any other key documents you need. Dayes Law Firm knows how overwhelming this can be, so contact us to schedule a free consultation now.
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