NonProbate Transfers Missouri

1
Non-Probate Transfers(Missouri)

• Right-of-Survivorship Co-owned Property
• Living (inter vivos) Trusts
• Life Insurance (paid directly to beneficiaries)
• Beneficiary Deeds (1989)
• Transfer on Death (TOD) (1989)
• Payable on Death (POD) (1989)

2
Since 1995, twelve states have passed new laws
allowing you an easier "non-probate" method for
leaving real estate to your heirs.  These states
are  Arizona, Arkansas, Colorado, Kansas,
Missouri, Minnesota, Montana, Nevada, New Mexico,
Ohio, Oklahoma, and Wisconsin.
Depending on your state, this new deed is called
either a "Transfer on Death Deed" or a
"Beneficiary Deed".
Source http//www.nonprobate.com/ viewed April
23, 2009
3
Beneficiary Deed (BD) to Pass Real Property
Ownership

• Conveys land title when grantor dies
• Deed must be recorded before grantor dies
  (recording requires a notary public)
• Beneficiary must survive the grantor
• Exception 1 If the beneficiary dies and was
  related to the grantor, then the BD goes to the
  beneficiarys descendants (LDPS Lineal
  Descendants Per Stirpes), UNLESS the BD
  specifically states no LDPS.
• Exception 2 If the beneficiary dies but was
  NOT related to the grantor, then the BD does NOT
  go to the beneficiarys descendants, UNLESS the
  BD specifically states with LDPS.

4
Revocation of a Beneficiary Deed

• Recording a revocation with county recorders
  office
• Deeding the property to another person (by sale
  or gift)
• A WILL cannot change or revoke a beneficiary deed
  UNLESS in the BD that right is reserved

5
Transfer on Death (TOD) for Personal Property  

• Stocks, bonds, equipment, livestock, grain, 
  right to receive payment under contract
• Can name more than one beneficiary and/or
  contingent beneficiary
• Can be revoked unless expressly made irrevocable
• Does not have to be executed with the formality
  of a will BUT beneficiary designation must be
• Written
• Signed
• Dated
• Acknowledged before a notary public (notarized)

6
How many states allow Transfer-on-Death
accounts?

• All but 14 states allow TOD brokerage accounts.
• If your state does not allow TOD accounts, you
  may still be able to open one if your broker is
  in a state that does allow them.

Source http//www.smartlegalforms.com/guide.asp?
level3id98 viewed April 23, 2009
7
Payable on Death (POD) for Bank Accounts
(Checking, Savings, CDs)

• Beneficiarys right to withdraw funds does NOT
  arise until after the grantors death
• POD accounts pass upon the death of the grantor,
  unlike joint bank accounts where any named party
  has the right to withdraw funds before the
  grantor dies
• Advantages
• Still control money in POD accounts
• Can be revoked at any time before the grantor
  dies, unless explicitly made irrevocable

8
How many states allow Payable-on-Death (POD)
accounts?

• All but two states allow POD accounts, which are
  also called Totten trusts or informal trusts.
• POD accounts are available at banks and credit
  unions. You can name a POD beneficiary for most
  types of accounts, including savings, checking
  and CDs. U.S. Treasury securities can be held in
  POD accounts, and you can designate a POD
  beneficiary on savings bonds.
• Creating a POD account is as simple as filling
  out a form that names a beneficiary.

Source http//www.smartlegalforms.com/guide.asp?
level3id98 viewed April 23, 2009
9
POD and TOD accounts bypass probate, but are they
also a way to avoid paying estate taxes?

• No. The beneficiary will have to pay estate taxes
  on the assets they inherit. The beneficiary may
  not be able to get the money until all taxes on
  the estate are paid.

10
What are the Drawbacks of POD and TOD accounts?

• Keep in mind that like joint-ownership accounts,
  POD and TOD accounts override the directions
  stated in your will.
• If you name one child a beneficiary on a POD or
  TOD account, but your will states that all assets
  should be divided equally among all your
  children, the POD or TOD beneficiary is not
  obligated to share the assets he or she has
  inherited.
• Some POD accounts do not allow more than one
  beneficiary.

11
Right of Survivorship Co-ownership vs.
Non-Probate Transfers

• Both automatically transfer ownership at death
• Both avoid probate
• Joint tenancy creates a co-owner during the
  lifetime of the owner (immediate vesting of
  property rights)
• Non-probate transfers give the beneficiary no
  rights in the property until the owner dies (can
  be revoked)

12
Which of the following transfers rights
immediately (vests) to the beneficiary/grantee?

• WILL (no)
• Life Insurance Policy (no)
• Tenancy in Common (YES)
• Joint Tenancy (YES)
• Tenancy by the Entireties (YES)
• Quitclaim/Warranty Deed (YES)
• Road Easement (YES)
• Beneficiary Deed (NO)
• Pay-on-Death (NO)
• Transfer-on-Death (NO)