Key Takeaways: Using a Deed to Transfer Property at Death
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Using a deed can help your heirs avoid probate court delays and expenses.
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However, deed transfers offer less control, no creditor protection, and no support if you become incapacitated.
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A living trust provides greater flexibility, ongoing management, and safeguards for your loved ones.
As a homeowner, planning for the future of your property is an essential part of estate planning. You may wish to keep your real estate in the family, pass it on to a specific loved one, or ensure it avoids the probate process entirely. Fortunately, using a deed to transfer real property at your death is one way to accomplish this — but it’s important to understand the pros and cons.
There are several types of deeds that allow you to transfer your home to someone else upon your death without the need for probate. However, while these deeds offer simplicity and cost savings, they may also come with unintended risks and limitations for your beneficiaries.
What Is a Deed in Estate Planning?
A deed is a legal document used to transfer ownership of real estate from one party to another. In the context of estate planning, certain types of deeds can be used to pass property automatically to your chosen beneficiary after you die, without the property needing to go through probate.
Common Types of Deeds Used to Avoid Probate
1. Life Estate Deed
A life estate deed lets you retain the right to live in and use your property during your lifetime. After your death, the property passes automatically to a named individual, called the remainderman.
- Benefits: Avoids probate, simple to establish.
- Drawbacks: You cannot sell or refinance the property without the remainderman’s consent. Conflicts may arise over home expenses or long-term intentions for the property.
2. Lady Bird Deed (Enhanced Life Estate Deed)
A Lady Bird deed is a special type of life estate deed. It allows you to maintain full control over your property during your lifetime — including the ability to sell, gift, or mortgage it — without needing the remainderman’s permission.
- Benefits: Avoids probate, preserves flexibility.
- Drawbacks: Not available in every state.
3. Transfer-on-Death (TOD) Deed
A Transfer-on-Death deed (also known as a beneficiary deed) allows you to name a beneficiary who will receive the property automatically upon your death. You retain full control over the property during your lifetime and can revoke the deed at any time.
- Benefits: Simple, avoids probate, revocable.
- Drawbacks: Limited to states that recognise TOD deeds.
Potential Downsides of Using a Deed to Transfer Property
1. No Protection From Creditors
When property is transferred by deed, the beneficiary receives it outright. This means the property can be subject to claims by your beneficiary’s creditors or be used to settle debts.
2. No Safeguards for Disabled Beneficiaries
If your beneficiary is unable to manage property due to a disability, a guardian or conservator may be appointed to handle it. Unfortunately, this can lead to misuse or mismanagement, especially if the person lacks experience or acts against your original wishes.
3. Lack of Control if You Lose Capacity
If you become incapacitated before death, the beneficiary of your deed does not have any rights to manage the property. Instead, a power of attorney or court-appointed guardian must act on your behalf, which may not align with your goals.
4. Your Beneficiary Can Use the Property However They Wish
Once your beneficiary receives the property, they can do anything with it — including selling it, renting it out, or using it in ways that may go against your wishes. You cannot impose conditions through a deed.
Should You Use a Trust Instead of a Deed?
If you want more control over how your property is managed or used after your death, a revocable living trust may be a better option.
By placing your home in a trust, you retain the right to live in it and manage it while you’re alive. After your death (or incapacity), a successor trustee can handle the property based on the instructions you’ve left behind — all while avoiding probate.
Key Benefits:
- Flexibility to set conditions and terms of use
- Creditor protection for beneficiaries in some cases
- Continuity of management in case of incapacity
Work With an Experienced Estate Planning Attorney
Choosing between a deed and a trust requires an understanding of your goals, your family’s needs, and your financial situation. While deeds offer simplicity and lower up-front costs, they may not provide the protection or flexibility you need.
At McClelland Law Firm, our experienced Arkansas estate planning attorneys can help you decide whether a deed or trust is the right fit for your estate plan. Visit or contact page or call us on 501-834-2070 to schedule a consultation.
Frequently Asked Questions
Can I avoid probate by transferring my house with a deed?
Yes, using a life estate, Lady Bird, or TOD deed can allow your property to pass to your beneficiary outside of probate. However, each comes with specific pros and cons.
What happens if my beneficiary dies before me?
If your named beneficiary dies before you, the property may need to go through probate unless you have a backup beneficiary or another plan in place.
Are Lady Bird deeds valid in every state?
No. Lady Bird deeds are only recognised in a handful of states, including Texas, Florida, and Michigan. An attorney can confirm if it’s available in your state.
How do I revoke a Transfer-on-Death deed?
You can typically revoke a TOD deed by filing a revocation form with your county recorder’s office before your death.