Understanding Beneficiary Deeds
Question: I serve as the trustee for my mother’s revocable living trust, with me being the sole beneficiary. Her home is the only asset in the trust. My mother wishes to streamline matters by recording a beneficiary deed for her home, transferring it to me. Can she, as the trustee of her revocable living trust, execute a beneficiary deed to me?
Answer: Unfortunately, the Arizona Court of Appeals has clarified that a beneficiary deed becomes valid solely upon the death of a “natural person” who owned the property. Hence, the property held within your mother’s revocable living trust cannot be directly transferred to you via a beneficiary deed. However, as the trustee of her trust, your mother has a workaround. She can record a warranty deed, transferring the property back to herself as an individual. Then, she can execute and record a beneficiary deed, passing the house to you. Once recorded and if not later revoked during her lifetime, this beneficiary deed will automatically transfer the property to you upon her passing.
Note: Arizona Revised Statute § 33-405 facilitates the recording of beneficiary deeds and includes a fillable form for such deeds. This statute also covers the revocation of beneficiary deeds and provides a fillable form for revocation. The intention behind this simplicity in recording beneficiary deeds and their potential revocations is to prevent expensive legal fees associated with alterations to estate planning documents.
At Andy Gregg Properties, we understand the complexity of property transfers and trust-related matters. If you seek further guidance or have additional questions about estate planning or property transfers, our team is here to assist you.
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