When preparing your estate plan, you may be thinking about the needs of your loved ones. You want to keep the process of getting their inheritance easy, quick, and with as little pain and heartache as possible. Preparing your assets now, not later, means you can focus on making the most of your time with your family, without the worry that they will have difficulties following your passing.
Transfer on death deeds, known as beneficiary deeds in Colorado, offer some peace of mind about your home, one of the largest assets you may own. If you are concerned about your deed and making the future easier for your loved ones, reach out to the team at The Germany Law Firm. We offer guidance through estate planning, giving you the support and guidance you need during this time.
When you are preparing your estate plan, it is important that you understand all the terms and details that can impact your plan. For example, terms like beneficiary and beneficiary deeds will show up many times, but what do they mean?
Beneficiaries are the people who receive the assets you leave behind as designated by your estate plan. This includes family members who benefit from trusts, loved ones you designate assets to in your will, and any others who receive assets after your passing.
A beneficiary deed is simply a deed that transfers the property in question to the designated beneficiary. In the case of a beneficiary deed, this means the property does not go through the lengthy process of probate, meaning your loved ones can simply enjoy the assets you have left them.
Creating a beneficiary deed allows the beneficiary to avoid probate, where the probate court would determine the beneficiary does have a claim to the property and that your estate plan is being followed according to the law. This can cost your beneficiaries some funds, meaning more time entangled in a court case, rather than enjoying what has been left for them.
Beneficiary deeds can also allow you to transfer a specific property from the probate estate. You may decide to parcel and transfer certain properties differently, for example. Your beneficiary deed allows you to do that, rather than going through a more complex process.
Probate may impact not only the amount of time it takes your family and loved ones to get these assets, but also the amount of funds they will receive. Probate can incur fees, meaning fewer assets your family could be enjoying. Your beneficiary deed or beneficiary deed makes this process simpler, quicker, and more cost-effective for your family.
Unsure about the best way for your family to avoid probate? You may have options that work best for your estate plan. For example, quitclaim deeds, joint tenancies, and life estates may all be mentioned as you are preparing your plan.
Because every case is different, our attorneys are prepared to help you find the best option for your case. Your lawyer can review the details of your case and help you find the best option for your needs.
A quitclaim deed allows you to renounce the right you have to a piece of land and transfer ownership to another party. While this may avoid probate, it can leave you and your loved ones in a vulnerable position.
For example, it leaves you open to being evicted by the grantee, or the person you have given the property to. It also allows creditors to claim the property if the grantee has financial problems. A beneficiary deed avoids all these issues.
Life estates allow you to stay on your property with all the rights as an owner until your death, and they can eliminate probate in specific cases. Unfortunately, your case is likely not so simple, and a life estate can cause more trouble than a beneficiary deed.
A life estate can only be changed or removed if both parties reach an agreement.
If the other party refuses to cooperate, you may have difficulties making changes. It also causes difficulties if you leave the property for a nursing home, where no one lives in the home but the grantee cannot take over ownership of the property. If you are unable to make decisions for yourself at this point, ending the life estate in these circumstances becomes impossible.
A joint tenancy is another option to keep your property rights during your lifetime but to relinquish them upon your death to the joint owner of the property. This is often used by married couples who simply want to transfer shared property to their spouse. While this option may work well for married couples, however, it can cause serious issues for agreements between people who are not spouses.
Much like quitclaim deeds, both parties may be subject to penalties, such as liens or bankruptcy, if one owner has financial problems. Joint tenancy does not protect you from the financial issues the other party may face. Beneficiary deeds not only protect you from these situations, but they also impact the interest and tax liability on the property. Your lawyer can help you determine how much your property would be impacted in these situations.
Choosing the best option for your family’s needs can be tough. You want to ensure they are getting the support they need after your passing, but you may not have the tools or the experience needed to make the best choice for your specific case.
That is what the team at The Germany Law Firm is here for. We understand estate planning can be complex, and you may be unsure what beneficiary deed is right for your case. We can help, starting with a free consultation. Reach out to learn more by calling (303) 454-3711 or by completing our online contact form.