The Transfer of Property Through Wills

By Carrie Ferland

The concept of a property deed is a simple one: The person whose name is on the title is the legal owner of the property. When the owner decides to transfer the title, it is as easy as adding the new owner’s name and signing. Unfortunately, this process is a little more difficult to accomplish when the owner of the property is deceased. However, the owner can still convey property even after his passing using his will, by instructing the administrator of his estate to transfer the property to his intended beneficiary.

Defining Property as an Asset

Before the testator can bequeath a property, he must define the property as one of his assets. To do this, the testator drafts a new section in his will, titled “Assets.” Here, the testator should list each separate piece of real property he owns, including the full physical address, lot number and a brief description of the property. While not required, the testator can also assign a nickname or a number to each piece of property to make it easier to assign to his beneficiaries.

Naming the Beneficiary

After defining all of her assets, the testator creates a new section, titled “Beneficiaries.” Here, she should draft a list of her intended beneficiaries, providing each individual’s full legal name, date of birth and, if available, Social Security number. Underneath each individual’s name, the testator should define the property she wants to bequeath to that beneficiary using the nicknames, numbers and/or the addresses described under “Assets.” If the testator is bequeathing all of her real and personal property to one beneficiary, she can also simply define her single beneficiary and direct the administrator to transfer the entire estate to this individual.

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Probating the Will

Once the testator passes, the appointed administrator should file the will with the appropriate surrogacy court. The court will review the instructions defined within the will and disperse the testator’s property accordingly. This process gives each named beneficiary the right to claim the inherited property, but note that it does not actually transfer the property title to the individual.

Re-Titling Property

With the right to claim the property adjudicated, the receiving beneficiary can request the original property title from the administrator or, if the property is under mortgage, the lender. The beneficiary must then complete an application to transfer the property title into her name from the office of the county recorder in the county where the property resides. Depending on the jurisdictional state’s laws, the administrator may also need to sign the application before processing. The county recorder will then issue a new title bearing the beneficiary’s name, at which point the beneficiary is the legal owner of the property.

Tax & Financial Implications

Before transferring the property into his name, the beneficiary should be aware that he might be responsible for state inheritance tax liabilities based on the fair market value of the property. Additionally, along with inheriting ownership of the property, the beneficiary inherits liability for any outstanding property taxes, liens or other judgments against the property. Likewise, if the testator passed away with an outstanding mortgage against the property, the beneficiary must take over the remaining loan, refinance and secure a new loan or liquidate the property to cover the balance. Of course, the beneficiary receives the difference between the sale price of the property and any outstanding liabilities, should he choose to liquidate.

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How to Prepare Your Own Will & Beneficiary Deed in Missouri
 

References

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