Beneficiary deeds can keep houses out of probate

Lois Zerrer is an attorney with Zerrer & Pruitt, which specializes in the legal needs of seniors.

Did you know that Missouri law allows you to pass your home to your children or another person of your choosing, without going through probate?

For several years, the law has allowed what are known as non-probate transfers. As the name states, these transfers allow you to give property to another person at your death without the necessity of the property going through probate.

You can avoid the expense of probate fees and the filing of court documents associated with the probate process. Your real estate will not be tied up in probate.

If you own your home, a vacation property or investment real estate in Missouri, these parcels can be transferred by means of a beneficiary deed. This special deed, when drafted properly and recorded, will convey an interest in real estate to the grantee designated in the deed. It expressly states that it does not take effect until the grantor's death. By operation of law, the transfer automatically takes place at the death of the grantor. The grantor is the owner of the property; the grantee is the person who receives the property.

The deed must be signed and recorded before the death of the owner. It need not be delivered to the person who will be receiving the property in order to be effective.

You should also be aware that not every state has a statutory provision for beneficiary deeds. So if you own real estate in another state, you should contact an attorney in that state to determine if a beneficiary deed could be used to transfer real property. A beneficiary deed also is different than a life estate, which transfers ownership of real property immediately but allows the grantor to live on the real property during his or her lifetime.

It is important to know that the deed does not interfere in any way if you wish to sell the property. Also, the deed can be revoked at any time if the grantor changes his or her mind about transferring the property to the person named in the beneficiary deed.

After the grantor's death, the person who takes title to the real estate takes the grantor's death certificate to the recorder of deeds. The recorder will record the death certificate and this will create a clear chain of title to the real estate. No real estate sale is involved. An appraisal is not necessary unless the new owner wants a professional assessment of the value of the property.

When the Missouri legislature allowed transfers of real estate by beneficiary deed, it took a big step in simplifying transfers of property outside of the probate process. If your real estate were to go through probate, it is likely that a petition would be required to sell the property, and court orders obtained to sell the property and to distribute the proceeds after the sale. The probate process for estates over $40,000 can take six months to a year to close the estate. If the estate is contested, it could take even longer. Since most people would opt to avoid probate, it is an easy matter to have a beneficiary deed drafted for your real estate.

There may be some instances when a beneficiary deed is not the proper method to transfer your real estate. If you have an existing trust, the real estate may already be in the trust and would pass under the provisions of the trust. In that case, a beneficiary is not necessary. Sometimes when a person has a complex distribution plan or multiple beneficiaries, a beneficiary deed may not be the easiest and best option. Contact your attorney to discuss whether a beneficiary deed fits into your estate plan. Your attorney knows the proper questions to ask to determine how to best meet your needs and carry out your wishes regarding your real estate.