What Is a Transfer on Death Deed in St. Louis and How Does It Work?
A transfer on death (TOD) deed, known as a beneficiary deed in Missouri, is a legal document that transfers ownership of real estate to someone else upon the owner’s death. It can be beneficial for individuals in St. Louis who wish to avoid the probate process for real estate but want to retain full control of their properties during their lifetimes. Speak with an experienced estate planning lawyer in St. Louis.
What Is a Transfer on Death (TOD) Deed?
An estate plan in St. Louis can involve various legal documents that organize an individual’s assets and properties in the event that he or she dies or becomes incapacitated. A TOD deed or beneficiary deed is a common inclusion among real estate owners in Missouri.
Transfer on death deeds are described in the Revised Statutes of Missouri § 461.025 as:
- A deed that conveys an interest in real property to a grantee designated by the owner, that expressly states that the deed is not to take effect until the death of the owner, transfers the interest provided to the designated grantee beneficiary, effective on death of the owner, if the deed is executed and filed of record with the recorder of deeds in the city or county or counties in which the real property is situated prior to the death of the owner.
These deeds name one or more beneficiaries who will automatically inherit a specific property upon the death of the owner (known as the grantor). A TOD deed circumvents probate court proceedings by transferring ownership to the named heir as an automatic inheritance when the grantor dies.
Transfer on Death Deed Considerations
The key elements of a transfer on death deed are that the owner or grantor will retain full ownership and control of the real estate while alive, but ownership will pass to named beneficiaries upon the death of the property owner. These deeds can be altered or revoked at any time before the owner’s death, and the beneficiaries will not have any power over the real estate until the grantor’s passing.
Advantages
TOD deeds have some advantages over other documents that transfer property rights. Unlike a will, beneficiary deeds do not have to go through probate. While property can be transferred to a living trust as part of an owner’s estate plan, this is a more complicated (and expensive) process than a TOD deed. Finally, a TOD deed avoids federal gift taxation, as naming a beneficiary is not an immediate transfer of ownership.
Limitations
There are some limitations and potential disadvantages to be aware of before you create a transfer on death deed. If you or your beneficiary relocates to a different state, the TOD may not be accepted, as they are relatively new and not available in every state. If the real estate involved in the deed is jointly owned, the death of one owner could interfere with the transfer process. TOD deeds also do not shield beneficiaries from debt liability and liens against the estate.
How to Create a Transfer on Death Deed in St. Louis
A transfer on death deed must give the name of the designated beneficiary/ies, not just list the person’s relationship to the owner. It must use specific language that clearly transfers ownership of the real estate upon the owner’s death. A TOD deed in St. Louis must be signed by the grantor and notarized to be legally valid. Finally, it must be filed with the county Recorder of Deeds office.
Contact a beneficiary deed lawyer in St. Louis to discuss whether this document is right for your estate plan. A lawyer can help you craft a comprehensive estate plan with all of the correct legal tools for your unique assets, needs and goals. If your attorney recommends a TOD deed, he or she can help you draft and finalize this legal document to ensure its validity. Contact us today.