A trust is not the only way to transfer property SanTan Sun News

A trust is not the only way to transfer property

April 29th, 2021 SanTan Sun News
A trust is not the only way to transfer property
Community
2

By Ben Gottlieb
Guest Writer

Can someone transfer real property to a beneficiary without using a trust?

In short, yes.

One vehicle to accomplish this result is through a standard will. This is the traditional means of transferring real property. A will, however, has its downsides – one of which is that a will in general must be “probated” through the court system.

This means that a probate attorney will need to file court paperwork with the probate court to validate the will.

A person can avoid probate by forming a revocable living trust and titling the real property in the trust. The person can then designate in the trust the beneficiary who would obtain the property upon the person’s death. But this would require using the trust as a vehicle to transfer the real property.

There is also a statutory mechanism under Arizona law where a grantor can transfer real property without using a trust or a will. This is generally accomplished through what is called a beneficiary deed. Essentially, the grantor conveys an interest in real property to a grantee beneficiary designated by the grantor.

The deed must state that it is effective on the death of the grantor owner and comply with the beneficiary deed statute.

The beneficiary deed may designate multiple grantees, and unless otherwise stated, the interest granted is the separate property of the named grantee.

A beneficiary deed is valid only if it is executed before a notary public and recorded with the local county recorder’s office. A beneficiary deed may be revoked but the revocation must be executed before a notary public and recorded with the local county recorder’s office before the death of the owner who executed the revocation.

Importantly, there are many benefits to using a beneficiary deed and many people utilize them.

First, although forming a revocable living trust avoids many of the costs associated with probating a will through the court system, a beneficiary deed also avoids probate and tends to save costs by avoiding trust- related fees. Further, the beneficiary deed is quick and simple and operates as an automatic transfer of the property to the stated beneficiary.

Further, as stated above, the beneficiary deed is revocable during the lifetime of the grantor. So, the grantor can continue to control the property as the grantor wishes during the grantor’s lifetime and can then revoke the beneficiary deed at any time if the grantor changes his or her mind on the beneficiary designation.

There may be tax implications associated with using a beneficiary deed and a tax and estate attorney or other professional should be consulted prior to using one.

Chandler attorney Ben Gottlieb and Ahwatukee attorney Patrick MacQueen are founders of MacQueen & Gottlieb PLC, one of the state’s top real estate law firms. If you have questions, you can contact Ben Gottlieb at ben@mandglawgroup.com or call 602- 533-2840.

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