Arizona Beneficiary Deeds

A Beneficiary Deed is a legal instrument that allows an individual or couple to leave any real estate to a family member or other beneficiary(ies) via a deed rather than through a will or trust. A beneficiary deed allows you to sign and record a deed during your lifetime that will transfer your real property to one or more people—your beneficiary(ies)—but only upon your death. The best part: A beneficiary deed protects your real estate from probate!

Unlike a normal deed, this transfer of ownership of property will not occur automatically – it will only occur upon your death. Unlike a trust, the owner of the property actually maintains control of the property rather than a Trustee. And unlike adding someone to the title of your property who then has a vested interest in your property, beneficiaries on a Beneficiary Deed have no vested interest in your property whatsoever until you pass (meaning, they don’t own a part of your property until you pass).

Consider the following scenario: If you add your child onto your property title, that child automatically becomes a co-owner in your property, regardless of whether they contributed to the purchase and regardless of whether they’re on the loan or not. If that child runs up debt or gets themselves into financial trouble, your property could be liened through a court judgment against your child (because you added your child to the title of your property). A beneficiary deed ensures your beneficiary(ies) have no vested interest in your property until you die. At that time, a simple recordation of your death certificate with the County Recorder’s office will ensure your property transfers to your beneficiary(ies) easily and without the need for probate.

It is important to note, however, that the value of your home will be attributed to your entire estate for tax purposes, so you don’t escape tax liability completely. However, your beneficiary(ies) will not have to wait until the probate closes to gain ownership of the property because the Beneficiary Deed protects the property from probate entirely.

  • What information is needed for a beneficiary deed?

    Creating your beneficiary deed is not complicated. Simply provide me a copy of your current Warranty (or similar) Deed to your home and the full legal name(s) of the beneficiary(ies) you wish to leave your property to. THAT’S IT! I’ll create your new deed and come to your home (if local) to sign you. Alternatively, if you’re out of state or out of the area, the entire process can be done by email and regular mail. Contact me for more information.

  • States offering Beneficiary (or similar) Deeds

    As of September 2019, the District of Columbia and the following states allow some form of TOD deed: Alaska, Arizona, Arkansas, California, Colorado, Hawaii, Illinois, Indiana, Kansas, Maine, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin and Wyoming. Ohio has replaced the TOD deed with a TOD affidavit, but the effect is the same. A few states, such as Michigan, have a similar but technically different document, commonly called a Lady Bird deed. If you own real property in another state, a beneficiary/TOD deed is a great way to protect your property from probate.

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