Beneficiary Deed, What You Need To Know

A Sun City beneficiary deed is used to transfer a property owner’s real estate to his or hers beneficiaries, after the property owner’s death. A beneficiary deed is a way for someone to avoid going through probate, which can be very expensive and take a long time to complete. Once a person has passed their property is transferred automatically to their beneficiary or beneficiaries as stated in their Sun City beneficiary deed.

The property owner must create a beneficiary deed before he or she passes and it is actually less expensive and less difficult to create than a trust. When the Sun City beneficiary deed is created the owner’s property is re-titled into the beneficiary’s name, however the property owner still “owns” the property, which means they can still live in it, as well as refinance it. The property owner is able to do whatever he or she wishes with the property until they pass, without permission of the beneficiary.

There is no gift tax liability because a Sun City beneficiary deed is not considered a present, it’s a transfer of ownership of the property listed. The owner of the beneficiary deed is allowed to change the deed at any time.

The property is listed as, joint tenants with right of survivorship or community property with right of survivorship; the property will still avoid probate, due to the fact that probate only occurs when the last remaining owner of the property dies. So, a Sun City beneficiary deed can still be created by the property owner, however the property will not be transferred to the beneficiary listed on the deed until the last property owner dies.

There are some down falls to a beneficiary deed, however. Since the property is not transferred to the beneficiary until after the property owner has passed, the entire value of the property will remain in the deceased’s estate for the sole purpose of estate tax. Another down fall is that if there is a mortgage lien on the house when the property owner dies, the beneficiary must take over payments if allowed by the mortgage company or qualify for a new loan in order to keep the property.

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