The Roundup -

Avoid Probate With A Beneficiary Deed

 

September 5, 2018 | View PDF



Did you know you could transfer your real property in Montana to one or more beneficiaries without probate? With a beneficiary deed you can pass your interest in Montana real property to a grantee beneficiary, but the deed is only effective upon your death. Grantee beneficiaries may be your spouse, children, relatives, friends, or charitable organizations, such as the 4-H program in Richland County.

Your grantee beneficiary has absolutely no ownership rights in your Montana real property until you die. Creditors of your grantee beneficiary or grantee beneficiaries cannot get access to your property.

Your beneficiary deed is recorded with the clerk and recorder in the Montana County where your property is located. All beneficiary deeds must have the post office address of the grantee beneficiary listed before the clerk and recorder's office will record it.

The deed must have a complete legal description of the Montana property that you wish to convey at death. You should use the legal description for the property from a previously recorded deed, not the description appearing on the property tax bill that is sent annually by the county treasurer.

After a beneficiary deed has been signed and recorded with the county clerk and recorder, it cannot be revoked by a provision in your will.

Example: Gary recorded a beneficiary deed naming his daughter as grantee beneficiary of real property he owns in Richland County. Gary later wrote a handwritten will leaving the same real property to his son. Upon Gary’s death, the provision in his will leaving the real property to his son is not valid. The real property would pass to Gary’s daughter under the terms of the beneficiary deed.

A beneficiary deed is a contract just like any other beneficiary designation, such as a payable on death designation on financial accounts or a transfer on death registration on stocks, bonds, and mutual funds. If Gary’s estate planning goal has changed and he now wants to pass the property to his son, he could revoke his beneficiary deed in which he named his daughter as the grantee beneficiary. Or, Gary could record a new beneficiary deed naming his son as the grantee beneficiary.

A handwritten will or a formal will with a provision that conflicts with beneficiary deed could result in “family drama.” Do you think Gary’s son and daughter will be speaking to one another because of the beneficiary deed naming the daughter as grantee beneficiary and a will with a provision naming the son as the devisee of the property? Both children can justifiably claim “Dad wanted me to have the land.” However, the beneficiary deed contract prevails and the daughter is the new owner of the property after Dad’s death.

Whether a beneficiary deed or a will or a trust is best depends on your circumstances. Some families may find all three estate-planning tools would best meet their estate planning goals. Discuss your goals with an attorney to assure you are using the appropriate legal tools for your circumstances. No two families are alike. Simply because one of your neighbors has a beneficiary deed doesn’t necessarily mean you should use one also.

More information is available in our MSU Extension MontGuide Beneficiary Deeds in Montana. (MT201407HHR) is available from our MSU Richland County Extension Office, 1499 N Central Ave, Sidney, MT. Also, coming up Friday September 14, 2018, is a workshop on estate planning. For more information or to RSVP, call the MSU Richland County Extension Office at 433-1206.

 

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