What is the easiest way to leave your real estate to your intended beneficiaries? There are several ways to do this in Missouri, including by Will, Trust, Joint Titling, or by using a Beneficiary Deed.
A Beneficiary Deed is one of the simplest, most convenient, and most frequently used methods in Missouri for leaving real estate to your intended beneficiaries upon your death. A Beneficiary Deed allows you to pick a beneficiary who will inherit your property when you’re no longer here, skipping the often complex and lengthy probate process, avoiding the cost or complexity of a Trust, and avoiding some of the pitfalls of joint titling of real estate.
All in all, a Beneficiary Deed is a very simple, quick, and cost effective tool for conveying real estate upon one’s death. However, what happens if a Beneficiary Deed is contested? This article will first provide a summary on Beneficiary Deeds and how they work, and will then discuss scenarios when a challenge could take place, and how such a contest might be handled.
A Primer on Beneficiary Deeds
A Beneficiary Deed is a legal document that allows you to name a beneficiary, or beneficiaries, who will receive your property once you’re no longer alive. A Beneficiary deed can often allow for a smooth transition, avoiding the often cumbersome and lengthy probate process that can take several months to years.
It is recommended that you have a legal professional, such as an estate planning attorney, create and record the Beneficiary Deed for you. There are several steps to this, including:
- Looking up or providing the current deed showing you own the property;
- Preparing a new Beneficiary Deed;
- Signing it in front of a notary, and then
- Recording the Beneficiary Deed at the Recorder’s Office during your lifetime.
After doing so, you still remain in full control of your property while living. You have simply chosen a beneficiary who will inherit the property at your death. Additionally, you can change or revoke the Beneficiary Deed at anytime while you are alive, you do not need the consent of any beneficiary.
In many cases, a Beneficiary Deed will be preferable to creating joint ownership. With joint ownership, you own the property with another person while you are alive. Sometimes people will title real estate jointly, intending that upon the death of one owner, the other party will continue to own the property. However, this can often backfire, due to simply misunderstanding the different types of joint ownership, such as tenancy in common vs. joint tenancy with rights of survivorship.
Conversely, a Beneficiary Deed allows you to maintain full control of your property during your lifetime. The transfer to the beneficiary only happens upon your death. This means the beneficiary has no rights to the property while you are alive. This gives you more flexibility and control when compared to joint ownership.
Beneficiary deeds are much simpler and cheaper than setting up a Trust, and work well if you simply want to transfer real estate upon your death, and do not need any special rules, terms, or conditions, and do not need anyone in charge. Beneficiary Deeds also avoid probate, unlike leaving real estate under a Will, which would go through Probate.
Contesting a Beneficiary Deed
As with any legal document, it is possible to contest a Beneficiary Deed in Missouri. The most common theories or allegations when contesting any legal document, including a Beneficiary Deed, are usually that the document was executed under duress or undue influence, or that the signer lacked the mental capacity to understand the implications of signing the document. There are also other theories for contesting a Beneficiary Deed, including concerns regarding the proper signing, notary, or recording of the documents, or concerns regarding the content of the document itself (containing incorrect parties, legal descriptions, other information). Please see below for more detailed information on various theories for contesting a Beneficiary Deed.
Hiring an attorney when making a Beneficiary Deed increases the chance of the Beneficiary Deed being created and recorded properly, and certainly lessens the chance of a successful contest at a later time.
Occasions when a Beneficiary Deed Could be Found Invalid in Missouri
Some situations in Missouri can impact the validity of a Beneficiary Deed, potentially making it invalid. Understanding these scenarios can be crucial in estate planning and ensuring your property is transferred per your wishes. Here are the most common situations:
- Undue Influence or Duress: If a property owner was forced, threatened, pressured, or manipulated into signing the Beneficiary Deed, it could be deemed invalid. This coercion could come from the beneficiary or a third party.
- Lack of Mental Capacity: A Beneficiary Deed might be contested and declared invalid if it’s proven that the property owner did not have the necessary mental capacity to understand the consequences of signing the Beneficiary Deed. This could be due to illness, age, mental defect or disease, or other factors.
- Improper Execution: A Beneficiary Deed must meet specific requirements to be valid, including being signed, notarized, and recorded with the county recorder’s office, during the Grantor’s lifetime. Failure to meet these requirements can render a Beneficiary Deed invalid.
- Improper Content: Did the Beneficiary Deed contain the correct legal description? Did it correctly identify the parties? Did it contain other incorrect information, or leave out information that was supposed to be included? Such questions and concerns could also form the basis of a contest.
Missouri law governs the creation, recording, and validity of Beneficiary Deeds. The Probate Court is the ultimate authority that would decide a case involving a Beneficiary Deed contest. In order to best avoid a future contest, it’s critical to understand and follow Missouri law when creating and recording a Beneficiary Deed.
Other Concerns with Beneficiary Deeds
While Beneficiary Deeds are very quick, easy, and effective, they are not free from potential problems. For your consideration, here are just some problems that can arise with Beneficiary Deeds:
- Disputes among Beneficiaries: If a property owner designates multiple beneficiaries, disputes might arise between the beneficiaries. Specifically, the beneficiaries might disagree about what to do with the property. Should they keep it? Should they sell it? What should the sale price be? Should a realtor be used, and which one? Any such disagreements can lead to legal disputes between the beneficiaries. In the event of such disagreements, a common remedy would be a “forced sale” or “partition sale” in with one of the parties asks the Court to sell the property and divide the money, because the parties cannot seem to agree on a course of action.
- Mental Competence of the Grantor: Questions about the mental competence of the grantor at the time of signing the Beneficiary Deed can lead to legal challenges. If it’s proven that the grantor didn’t have the mental capacity to understand the implications of the Beneficiary Deed when they signed it, the Beneficiary Deed could be declared invalid. In such an event, the Beneficiary Deed would be like it never existed, and any previous planning, or lack thereof, prior to the creation of the Beneficiary Deed would prevail.
- Contradiction with Decedent’s Will, Trust, or Other Estate Planning Documents: Sometimes, a Beneficiary Deed can contradict the deceased’s Last Will and Testament, in particular. For instance, the Will might state that the property should be divided among all children, but the Beneficiary Deed designates only one child as the beneficiary. In this case, the Beneficiary Deed takes precedence over the Will, but the existence of this contradiction could lead to legal challenges from the other children who did not inherit under the Beneficiary Deed.
Missouri laws have procedures to handle these potential issues. If disputes arise among beneficiaries, the Court can decide who is right based on the evidence provided. If the mental competence of the grantor is in question, a medical examination or other medical records at or near the time of signing the Beneficiary Deed could be crucial evidence.
Understanding the potential problems and legal remedies associated with Beneficiary Deeds can often help the creator of a Beneficiary Deed better avoid any such future issues. If you are currently facing such issues, the advice and counsel of an experienced Estate Planning Attorney is strongly recommended.
Handling Disputes with a Beneficiary Deed in Missouri
When dealing with issues involving the creation, interpretation, or contest of a Beneficiary Deed, professional legal help is invaluable. The Piatchek Law Firm, LLC has a wealth of experience in the area of Beneficiary Deeds, and are well-versed in the intricacies that can be involved.
Make no mistake, a Beneficiary Deed is generally a simple, straightforward, and cost effective method to leave property to your loved ones. However, as you can see, Beneficiary Deeds are not without problems, and not above contest, and can occasionally involve legal nuances or intricacies that will require the advice or assistance of an attorney.
Understanding Beneficiary Deeds in Missouri
Beneficiary Deeds can be a beneficial tool for estate planning in Missouri, providing a simple, quick, and affordable means to transfer property upon death. However, they can occasionally give rise to disputes. Understanding the mechanisms of Beneficiary Deeds and the laws regulating them in Missouri can help you navigate any such issues.
If you need assistance with a Beneficiary Deed, or any concerns regarding a Beneficiary Deed, including a dispute, don’t hesitate to contact The Piatchek Law Firm, LLC. Our expert Estate Planning attorneys are ready to guide you and help you achieve peace of mind.