What Happens if You Do Not Revoke a Beneficiary Deed?

By Tom Streissguth

A beneficiary deed allows the owner of property -- also known as the grantor -- to pass property directly to a beneficiary upon the grantor's death. With this document, the property does not have to go through probate or subjected to gift taxes before the beneficiary can take legal title to it. Although a beneficiary deed can be quite helpful to those inheriting property, both grantor and beneficiary should be aware of the consequences of allowing a beneficiary deed to stand even when circumstances change.

Revocation Document

To revoke a beneficiary deed, a grantor simply executes a revocation document. This is a statement that the deed is no longer in effect and any bequests of property by the terms of the deed are no longer valid. The revocation must be signed, dated and witnessed. You should file it in any court or recorder’s office where the initial beneficiary deed was filed. You should also send it by certified mail, return receipt requested, to the beneficiary named in the beneficiary deed.

Grounds for Revocation

The revocation of a beneficiary deed may come about through a grantor's change in plans for the estate or a beneficiary disclaiming the property. If a beneficiary disclaims a bequest of property and the beneficiary deed has not been revoked by the grantor, the property must go through probate court where the property will be dispersed in accordance with the state’s inheritance laws.

Get help changing your legal name. Learn More

Property Transfer

Ordinarily, a beneficiary deed that is not revoked will cause the property to transfer to the individual named as beneficiary. Grantors who wish to change the terms of a beneficiary deed by simply drawing up a new one, without legally revoking the original, risk protracted legal wrangling among the named beneficiaries, defeating the original purpose of a beneficiary deed: to avoid probate court.

Death of Beneficiary

If the beneficiary deed is not revoked and the beneficiary dies before the grantor does, the beneficiary’s heirs may claim the property. The laws governing this transfer vary by state. In Missouri, for example, the law requires the individuals making such a claim be the beneficiary’s direct descendants. If the grantor does not wish the property to pass to the beneficiary’s direct descendants, he may designate “no LDPS” after the beneficiary’s name in the deed, which effectively terminates the bequest upon the death of the beneficiary. LDPS is a legal acronym that stands for “lineal descendants per stirpes.”

Get help changing your legal name. Learn More
How to Add a Beneficiary to a Mortgage Deed


Related articles

Difference Between Last Wills and Living Trusts

A person's last will is a document that contains her directions as to what she wants to happen to her property after her death. A living trust, also called an "inter vivos" trust, is a conveyance of property -- during a person's lifetime -- to a trust in order to avoid probate, reduce taxes and other reasons. While wills and inter vivos trusts can both dispose of property, there are many differences between each type of document.

Can an Inheritance Be Given Before a Person Dies?

An inheritance is the transfer of property after a person passes away. Property can be transferred at any point before or immediately after the person's death. How that property is transferred depends on the wishes and priorities of the donor. One key issue is whether the donor wants to retain the use and control of the property for the duration of her life or is willing to relinquish it. Another issue is taxes. Many property transfers will be taxed as gifts or as part of an estate. Minimizing tax liability may be an important consideration when determining if and how to transfer property prior to death.

Does a Will Supersede a Gifted Deed?

Beneficiaries under a will may be disappointed if they discover upon the death of the maker of the will that he had already given away the family’s home by gift deed. A gift deed conveys property without a monetary purchase price. If the person who wrote the will, called the testator, clearly intended to convey the property, there may be little the beneficiaries can do to re-acquire it as estate property. If, however, foul play is suspected or mistakes or flaws exist in the property transfer, the beneficiaries may ask the court to determine property ownership.

Doing the right thing has never been easier. Name Change

Related articles

How to Prepare Your Own Will & Beneficiary Deed in Missouri

A will is a legal instrument that tells the probate court how to distribute your assets after you die. Because the ...

How to Disclaim a Beneficiary Deed in Arizona

Since 2001, the state of Arizona has allowed property owners to sign and record a beneficiary deed conveying property ...

How to Refuse to Inherit a House

For various reasons, you may wish to disclaim property that was willed to you by a relative. Beneficiaries may file ...

Taxes & the Advantages of Living Trusts

A living trust is a document that a person creates while he is still alive, which enables him to financially provide ...

Browse by category
Ready to Begin? GET STARTED