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 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, 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.

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 assistance of an attorney to ensure that the correction is actually a correction and causes no additional issues with the deed or property title.

Unfortunately, problems with a defective or invalid deed are often not discovered until after the owner’s death. If this is the case, the problems cannot be fixed with a corrective deed since the deceased owner is unable to sign it. Instead, the property will most 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. Worse yet, the property could end up being inherited by someone the owner did not want receiving it, either because they intended to disinherit the individual or because they wanted someone else to receive the property.

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 bucks 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 New York may not necessarily be valid in Florida).

If you want your home or other real estate to pass to your children or other beneficiaries without probate, seek the advice of an attorney familiar with the probate and real estate laws of the state where your property is located. This will ensure that the deed will be valid and that your property will, in fact, avoid probate and pass on to your intended heirs. Adding individuals to your deed may not be the best approach, depending on the circumstances. There are considerations related to gifting, tax consequences, and potential misuse that you may not have yet considered. In addition, if your ultimate concern is avoiding probate, an experienced estate planning attorney can discuss all the options available to you to ensure that any actions are taken in your best interest and carry out your wishes for your loved ones. If you are interested in crafting a plan to avoid probate for your loved ones, call us.