Our lawmakers are giving taxpayers another break from expending considerable amounts of cash paying for probates, family trusts, life estates or any other form documents which will transfer assets to their children in a future time, effective on the death of the last surviving owner.
On August 9, 2001 the legislature of the state of Arizona enacted an amendment to Title 33, Chapter 4, Article 1 of the revised statutes, by adding Section 33-405 and amending sections 11-1134 and 42-15101, relating to conveyances and deeds.
The law alleviates certain ambiguities regarding life estates and the rights or interest of the holder of the life estate and the owner of the remainder, when it comes to qualifying for a tax exemption offered to widows, veterans and senior citizens.
A beneficiary deed is made specific by conveying title effective on the death of the owner, or last surviving owner, thus creating an estate in expectancy which some time in the past was outlawed.
The grantee may be a multiple grantee or a successor grantee or both. A multiple grantee could acquire title as joint tenants with right of survivorship, as tenants in common or any other tenancy that is otherwise valid under the laws of the state of Arizona. A grant to a successor grantee shall state the condition on which the interest of the successor grantee would vest.
A beneficiary deed carries no warranties. It conveys an interest in real property including any debt secured by a lien on the property. It can also be revoked at any time by the owner, or in the event there are several owners, by any of the owners or by the last surviving owner. If the last surviving owner did not execute the beneficiary deed, the deed is invalid. Also in order to be valid it must be recorded as provided by law in the office of the Recorder of the county in which the property is located, before the death of the owner or the last surviving owner.
Because of the uniqueness of this type of conveyance it may not be necessary to insure a transfer made by a beneficiary deed, since actual title may be had in a future time, that is if it has not been revoked or transferred to another individual or entity.
In any event it seems that this type of transfer is ideal for simple estates. It avoids probate and does away with potential adversities of a joint tenancy with right of survivorship estate, which so far has been for the average Arizonan the “panacea” for avoiding probate.