When planning your estate, keep in mind some types of property may not pass according to the provisions of your will or state inheritance laws. For example, when trying to determine who will inherit any real estate you own, the first step is to look at how you hold title to the property. This article provides an overview of how certain types of property deeds may be used in making an estate plan.
While making an estate planning deed may seem like the perfect way to achieve some of your estate planning objectives, making a deed involves complying with many legal formalities. Failure to comply with any one of the requirements for making and recording a deed can result in costly legal problems for your heirs and beneficiaries.Keep these key points in mind when making an estate planning deed:1. The laws governing real property deeds are state-specific. Therefore, what you may have read about estate planning deeds online may not apply to deeds in the state where your property is located. Always verify that the deed complies with the requirements of applicable state laws.2. The requirements for how a deed must be signed, and whether it must be witnessed or notarized, vary from state to state. Be sure you understand these requirements before you attempt to execute the deed, especially if it needs to be signed in the presence of witnesses or a notary public.3. Recording the deed with the local county clerk is typically an important step in making a new deed. The fees required to record a deed vary significantly from one jurisdiction to another. Contact the county recorder's office for instructions on how to record your estate planning deed and what fees must be paid. Many county recorders have websites that provide information on the process for recording a deed in their county.4. Make sure your deed complies with any requirement for consideration to make the deed valid. If you do not know what consideration is required to make a valid estate planning deed in the state where the property is located, consult a licensed attorney.
Mistakes in Using Deeds for Estate Planning
It may seem like a great idea to use real property deeds to carry out your estate plan. The most obvious reason is it is generally less expensive to make a deed than to make a will and a living trust. You may also think it is less complicated to make a deed than to deal with all the decisions that must be made to complete an estate plan.Nevertheless, using deeds as your sole method of estate planning is a common cause of estate litigation after an owner dies and may result in serious problems in settling your estate. The following is a list of common mistakes that may result from making property deeds for
estate planning without the advice of an attorney:
1. Making a real property deed that is inconsistent with the provisions of your will, living trust or other estate planning documents, which may cause will and trust disputes.2. Failure to comply with requirements for executing, filing or recording the deed, which vary by jurisdiction.
3. Failure to properly execute and record any intended revocation of a deed or other desired changes to a deed when your estate planning objectives change.4. Failure to consider the impact any liens or encumbrances on the property may have on your heirs or intended beneficiaries.5. Failure to consider the impact the new estate planning deed may have on the ability of your estate to fulfill bequests in your will or pay debts owed after your death, including funeral expenses and medical bills from last illness, etc.
Real property deeds are an important part of making an estate plan. However, the proper way to use deeds for estate planning is to view them as only one part of a comprehensive estate plan. You can also look at property deeds as one step you take in a series of steps to ensure your entire estate is distributed in the manner you want. You cannot simply make a deed and then assume your estate plan is complete. Review all your property deeds and ensure that title to property is held in a manner this is consistent with your will and any other estate planning documents, such as estate planning trusts. The use of deeds for estate planning purposes requires an understanding of several complex areas of law. Only an attorney licensed in the state where the real estate is located can properly advise you on how to make and record a deed that will fulfill your estate planning objectives.
How Much Does an Estate Planning Deed Cost?
The price to have an estate planning deed drafted and recorded depends on several factors. The first is whether your attorney bills you a flat fee for preparing the deed or uses an hourly rate basis. To get the best price, ask your attorney for a flat fee quote to prepare the deed.
The next factor is whether you meet with the attorney regarding the estate planning deed or are billed for several phone calls, letters, emails, and legal research relating to the deed. Although it typically costs between 100 to 400 U.S. Dollars to have a simple deed prepared by an attorney, the cost may be higher if there are complex issues involved or a lot of communications are required to complete the process. Also, if you own out of state property, that may increase the cost of making an estate planning deed.
To complete the process of making an estate planning deed, your attorney may have to record the deed with the county recorder where the property is located. You will have to pay all recording fees required by the county recorder. Finally, the cost to record an estate planning deed depends on other factors, such as where you live and the type of attorney you hire. If you live in an expensive city and use a lawyer in a large law firm to prepare your deed, it will typically cost more than if you live in a rural area and hire a solo practitioner. To get the lowest price from a reputable attorney, obtain at least three fee quotes and read our tips on finding an attorney.
Methods of Holding Title to Property
For an overview of the estate planning ramifications of different forms of title, see the following pages:
Tenants in CommonJoint TenantsTenants by the EntiretyCommunity Property
Community Property with Right of Survivorship
Note, the above methods of holding title are not available in all states. An attorney licensed in the state where the property is located can advise on how title may be held in that state. Refer to our page on title to property for more information.