If you own real estate and would rather see it transferred directly to a beneficiary without needing probate, you will need to do your due diligence when it comes to planning ahead and understand the applicable laws of your state. This will allow you to come up with a solid strategy to keep your real estate assets out of probate.
What Options Will Are Available to Keep Your Assets Safe?
The first option is fairly safe and accepted by most states, but it can be more complex and rather expensive to maintain: setting up a living trust and placing all your real estate assets into it. These assets can then be directly distributed to your beneficiaries.
The second option is to transfer the property using a beneficiary deed or transfer-on-death deed. This is a type of deed in which you transfer the property from your sole name to the name of your beneficiary; however, the deed is not valid until your death, and you will continue to own and control the property until then. Your beneficiary will only receive legal rights to it after you pass away.
Do You Need a TOD Deed?
You will need to register your TOD (transfer-on-death) deed with the county lands record office where your property is located. This type of deed is easy to change and update—if later on you decide you would rather have a different beneficiary or change your mind altogether, all you have to do is revoke the deed and create a new one. Another advantage is that a TOD deed will not result in gift tax, because you are not giving away your property during your lifetime—even though it will still count toward your estate tax, when applicable. Once a death certificate is filed and recorded with the same county lands record office, the beneficiary of your TOD will officially receive ownership of the property.
A transfer-on-death deed is not recognized by every state, so double-check the laws of your state to see if this strategy would work for you. Tennessee and Kentucky do not allow transfer-on-death deeds, but many of our clients own real estate in other states and may choose to take advantage of TOD deeds in order to avoid ancillary probate proceedings. If you would like to establish a strategy to keep your real estate property out of probate, the best move is to consult an attorney. State laws often change, and it is important to understand which option would be the most favorable for your specific situation. The Clarksville estate planning attorneys at Crow Estate Planning and Probate, PLC can help you analyze all your options and create a plan to preserve your assets and avoid unnecessary probate proceedings. When you want to plan for the future of your family, our seasoned legal team is standing by. Contact us for a consultation to get started.