A beneficiary deed form—also referred to as a transfer on death deed—is a method of transferring the title to real estate when the owner dies. People planning the disposition of their assets may use these deeds to avoid probate and make it simpler for their heirs to take ownership of property. Using a beneficiary deed might make sense if you have property but not enough assets to warrant establishing a trust.
Which states allow the use of this transfer method?
Twenty-nine states allow property to be transferred using a beneficiary deed. Of those, 15 adopted the Uniform Real Property Transfer on Death Act (URPTODA) introduced by the Uniform Law Commission as a model. If the property is in a state that allows you to use this method of bypassing probate, make sure you identify the specific form for that state. Using the form for a different state might invalidate your efforts. You will need a copy of the property’s deed. If you don’t have that, you can get one from the County Recorder’s Office. That agency might use a different name, such as the Records Office, Land Recorder, Real Property Office, or Registrar of Deeds.
How does the process work?
Each participating state will have its own protocol, but typically it is straightforward:
- Acquire the form. You can obtain one from an online search for “Beneficiary Deed” or “Transfer on Death Deed” or often from the same Recorder’s Office that holds copies of the deeds. Ensure that you find one for the state where the property is located.
- Complete the form, being specific about the beneficiaries. For example, use your intended heirs’ full names rather than stating that the property goes to "my children" or "my brother."
- Use information from your property’s deed to complete the form. It’s helpful to note that a Deed of Trust is not the document you need—it is about your mortgage, not the property itself.
- Record the deed. Recording is a legal process that includes notarizing (demonstrating your identity to a professional notary), witnessing, then filing with the recording office. The Beneficiary deed won't be valid unless it is recorded.
Can I change my mind?
Filing a beneficiary deed is revocable, just like writing a will is. The action has no impact until the grantor dies, so if you record a beneficiary deed and change your mind, you can invalidate it by filing a revocation form. The revocation process is much like the original filing process; you can obtain the documents from the same source. As with the original beneficiary deed, the revocation isn’t official until you file the form with the appropriate office in the relevant county.
Do I still need a will?
Most people need a will, but it depends on the complexity of your financial affairs. You can use beneficiary deeds to transfer many assets to your intended heirs. But like trusts, you can't use a transfer deed to communicate your wishes. For example, if you have instructions regarding the guardianship of your children or the distribution of sentimental items, these need to be included in a will. However, using a will requires probate, so using the beneficiary deed can streamline the process of directing those assets to their intended recipient.
This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor.
Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation.
