in Missouri, Beneficiary Deeds are a handy and valuable tool. Used properly, they transfer ownership of real estate instantly and automatically upon the death of the person or persons who created the deed, bypass probate, and they are relatively inexpensive.
So — why doesn’t everybody use them all the time? The simple answer is — everything has a time and a place.
Beneficiary deeds tend to be most appropriate where estates are smaller, families are simpler, people get along, etc.
Here are some factors that tend to make Beneficiary Deeds a bad idea:
- Blended (Second Marriage) families
- Children or other beneficiaries with marital problems
- Children or other beneficiaries with money problems
- Children or other beneficiaries with substance or alcohol problems
- Children or other beneficiaries with health problems
- Disabled beneficiaries
- Children or other beneficiaries and/or spouses who don’t get along
- Estates where disability management is important
- More complex estates — mutiple assets, whether real estate or otherwise
This is not a comprehensive list. Again, Beneficiary Deeds work well in simpler situations. Although they are powerful in terms of their potential, the same attributes that make them simple to use and operate, also severely limit their flexibility.
Beneficiary Deeds certainly have a place, but it’s a mistake to try to fit a square peg into a round hole. They are very inexpensive, relatively speaking. However, it only takes one thing to go wrong and any money that might have been saved has now been spent many times over.
The things that can go wrong include people dying in the wrong order, people getting sick, marriages turning bad, etc. It is also important to realize that if you leave real property in Missouri to three people, for instance, and they are all married, all three PLUS their spouses have to agree in order to sell or otherwise dispose of the property. This can be cumbersome at best, or virtually impossible when things go sour.
Beneficiary Deeds also do nothing to enable management of the property if an owner is disabled.
Trust Based Plans are the best alternative to Beneficiary Deeds. They solve all the problems that present themselves, and provide for maximum flexibility.
Don’t get tunnel vision when making the decision, and don’t be penny-wise and dollar foolish.
Email us or call us if you have more questions.