Question: How is an Arizona Beneficiary Deed different from any other Arizona deed?
Answer: When most people think of a deed, they think of the typical Warranty Deeds, Special Warranty Deeds or Quit Claim Deeds. As soon as a person signs and records one of these types of deeds (the “grantor”), the legal title of the property is passed to the person named in the deed (the “grantee”). Meaning, the legal transfer of title to the grantee is effective immediately upon executing and recording the deed.
A Beneficiary Deed works a little differently. When the grantor signs and records a Beneficiary Deed, the legal transfer of title to the grantee does not occur immediately. Instead, the title is transferred only after the grantor passes away. This feature makes Beneficiary Deeds a very useful tool in planning who should inherit your real estate.
A.R.S. Section 33-405 spells out the requirements for creating an Arizona Beneficiary Deed. The most obvious requirements include properly naming the grantor and grantee and correctly stating the legal description to the property. The deed also needs to state what should happen should the grantee beneficiary pass before the grantor property owner. There are other requirements if the grantor wishes to transfer his or her property to a trust after passing.
In addition to ensuring that the property will pass to the person(s) of the grantor’s choosing after the grantor’s death, a Beneficiary Deed is also an effective way to ensure that the grantor’s real estate isn’t subject to probate. Assets that pass to a designated beneficiary after someone dies usually aren’t subject to probate. For example, if a person who owns life insurance dies, the life insurance payout will be paid to the beneficiary listed on the policy – usually without the interference of a probate court. Most IRAs work the same way. So do Beneficiary Deeds.
In Arizona Beneficiary Deeds are an easy and popular way to transfer real estate after a person’s passing. Used in conjunction with other techniques, a person may be able to avoid probate entirely, or at least substantially simplify the procedure. Call Scottsdale trust attorney Abigail Neal to discuss how a Beneficiary Deed could be a benefit to you and your loved ones and how a Beneficiary Deed can compliment your overall estate plan.