Wednesday, April 9, 2008

Wednesday's with Connie ~ Beneficiary Deed

Beneficiary deed is new to the state of Montana. When taking title to a property, most commonly that is by warranty deed. A new "rider" option was added during the last legislative session and that is the beneficiary deed.

A beneficiary deed names a beneficiary to your property should something happen to you. The beneficiary receives no rights to the property, cannot borrow against the property, and you cannot be sued or loose your house for something your beneficiary does. The only time the beneficiary has a right to your property is at your death. Upon death, the beneficiary automatically becomes the owner of your property and that property does not have to go through probate. The advantage is that this property can be immediately sold should money be an issue at the time. All loans on the property still need to be paid and the beneficiary may still be subject to inheritance tax.

Practical uses of a beneficiary deed is for the single person who doesn't have a family or chooses to leave their property to someone else. Another use is sibling to sibling or parent and child. In the event of an unexpected loss, the beneficiary can readily make decisions without going through many months of probate, which can be detrimental to savings accounts.

No one likes to think about these things, but planning for them is vital. Should you want more information, ask your title company or send me an e-mail.

No comments: