After working hard and acquiring property and assets, what happens to it upon your death?
With life expectancy rates lowering for the first time in decades, those end-of-life decisions remain more important than ever. When it comes to real estate, you have options in Arkansas regarding how you can leave it to loved ones. Besides a will or trust, you might consider a beneficiary deed.
Pros
As its name implies, a beneficiary deed allows you to transfer your real estate to a designated person or persons. These deeds only take effect upon death. While still living, you still have full ownership of the property. Your beneficiary only has a stake in it upon your death.
Avoiding probate and a quick transfer of property remain the top reasons to consider a beneficiary deed. This method keeps the property out of the estate, which means fewer costs and delays associated with probate proceedings. It also lets you avoid or delay gift taxes.
Additionally, beneficiary deeds tend to be less expensive and provide flexibility. At any time, you can change your beneficiary.
Cons
Like with many things, you need to consider the downsides of a beneficiary deed. While it may remove some hassle for your beneficiary, they will still have to pay estate taxes and have no protection against creditors or lawsuits.
Drafting a beneficiary deed requires specific, succinct language to ensure it meets the state’s criteria. If you have one small mistake, the deed may fail.
Regardless of your situation, you should develop some form of an estate plan. A beneficiary deed offers you a way to protect your assets and often works alongside an existing trust.