Every testator creating or expanding an estate plan has their own priorities. For some people, keeping assets out of probate court is a key goal. When major resources pass through the probate courts, they are vulnerable to creditor claims.
Hospitals that provided end-of-life care, credit card companies and even the Medicaid estate recovery program could seek the liquidation of high-value assets in their pursuit of repayment from an estate. Additionally, assets that pass through probate as part of an individual’s estate can potentially add up to a sufficient amount to trigger estate taxes.
Arranging for real property to transfer to specific beneficiaries without passing through probate court can be beneficial for a variety of reasons. A deed could potentially help an older adult achieve that specific goal.
Real property can transfer after an owner dies
California allows real property owners to execute transfer-on-death deeds before they die to protect their homes after they pass. As the name implies, a transfer-on-death deed allows for the quick transition of ownership to a specific beneficiary after the death of the current owner.
The beneficiary named as the new owner takes the deed, identification and proof of the owner’s passing to the county recorder’s office. The home does not have to pass through probate courts as part of an estate to transfer to the new owner.
Transfer-on-death deeds are useful in cases where people want to retain sole ownership of their property until they die but aspire to keep their homes out of probate court after their passing.
Title changes can occur in advance
Waiting until after an individual dies to transfer real property ownership isn’t always necessary. In some cases, it may be possible to make title adjustments before the current owner dies.
If they currently live with the person who should inherit the home, they can execute a deed to hold title as joint tenants with rights of survivorship. When either of the tenants dies, the surviving tenant then automatically assumes the other party’s interest in the property.
Deeds can be valuable additions to robust estate plans. Looking into ways to keep valuable assets out of probate court can help people optimize their legacies.