Caution: Using a DIY Deed to Avoid Probate Can Lead to Unintended Consequences
One common way to avoid the probate requirement for real estate after the owner dies is to add children or other individuals to the property title as joint owners with rights of survivorship. When joint owners have survivorship rights, and one joint owner passes away, the remaining owners automatically receive the entire interest of the deceased owner.
For example, if there are three joint owners with rights of survivorship, when one passes away, the two remaining owners each own 50 percent of the real estate by operation of law. No court involvement or probate is required to make this transfer. When the second owner passes away, the surviving owner owns 100 percent of the real estate. Again, no probate is required to make this transfer.
To create joint ownership with survivorship rights, the current owner prepares a new deed that transfers the property from themselves (as the original owner) to themselves and the children or other individuals they would like to share in ownership. The deed should also include language to indicate that the recipients are joint owners with rights of survivorship. The exact language included in the deed will be governed by state law. The signed deed is then recorded in applicable public land records.
Many believe they do not need an estate planning attorney to help them prepare and record a new deed. Instead, they think a deed template can simply be downloaded online or obtained from a book, filled out, signed, and then easily recorded. However, deeds are legal documents that must comply with state law to be valid. In addition, in many states like Illinois, property will not pass to the other owners listed in a deed free of probate unless certain specific legal terms are included in the deed. An estate planning attorney can ensure that your documents comply with all necessary regulations.
What Happens if There Is a Mistake with My Deed?
If there are problems with a defective deed or a deed is invalid, and it is discovered before the owner dies, then the problems may be addressed by preparing and recording a corrective deed in the applicable public land records, depending on your state law. This should be done only with the help of an estate planning attorney to ensure that the correction is accurate and prevents further complications.
Unfortunately, problems with a defective or invalid deed are often not discovered until after the owner’s death. If this is the case, the problem cannot be fixed with a corrective deed since the deceased owner is not able to sign it. Instead, the property will likely need to be probated to correct the problems with the title. Aside from the probate process taking time and costing money for legal fees and court expenses, the property cannot be sold until the problems with the title have been sorted out in probate court. Working with an estate planning attorney minimizes the risk of such complications.
What Should You Do?
If you want to add your children or other beneficiaries to your deed to avoid probate and you think you can save a few dollars by using a form you find online or in a book, think again. Deeds are legal documents with very specific requirements and are governed by different laws in each state (in other words, a deed valid in Illinois may not necessarily be valid in Florida). A corrective deed may sometimes be necessary to fix oversights or mistakes.
If you want your home or other real estate assets to pass to your children or other beneficiaries without probate, seek the advice of an estate planning attorney familiar with the probate and real estate laws of the state where your property is located. Adding individuals to your deed may not be the best approach, depending on the circumstances. There are considerations related to gifting, tax consequences, potential misuse, and asset protection planning that you may not have yet considered. An estate planning attorney can assist in creating a tailored plan that aligns with your goals and protects your loved ones.
Conclusion
Planning for the future requires attentive consideration and professional guidance. While DIY solutions may appear cost-effective, they often lead to unforeseen complications that require legal intervention. By consulting an estate planning attorney from Pavone Law Group, you can ensure that your assets are protected, your wishes are honored, and your loved ones are provided for without unnecessary legal hurdles. Additionally, using tools like a corrective deed under expert advice can prevent errors from escalating into costly probate battles. Trust Pavone Law Group to help safeguard your legacy with customized solutions tailored to your needs.