Wills Vs. Deeds

By Rob Jennings J.D.

While wills and deeds are completely different documents -- a will disposes of one's estate upon death and a deed passes an interest in land or other real property -- both of them have the effect of transferring ownership of property, and both can be used in disposing of such property in the context of estate planning. Deciding how to pass ownership of property to one's heirs -- whether to leave it in a will or convey it now via a deed -- requires a consideration of the advantages and drawbacks of each.


Once a deed is executed by the grantor and accepted by the grantee, the grantor no longer owns it. This transaction creates a degree of inflexibility in estate planning, as it limits the ability of the grantor to control what happens with the land as time goes on. A will, however, is subject to revision and change at the whim of the testator all the way until he becomes incompetent or dies. As such, if he develops second thoughts about who should get a particular piece of property, the will leaves him free to change his mind. If he has already conveyed the property via a deed, he is dependent upon the grantee to honor his wishes and convey it back.

Present Control

Conveying property to another by means of a deed completely transfers ownership of the property to that other person. While you may have complete trust in your son, daughter or grandchild to allow you to keep living in the family home after you deed it over to them, you need to consider what would happen to the property if the grantee were to predecease you. The land could end up in the hands of the grantee's creditors or heirs with whom you do not get along. Making arrangements for the land in your will preserves your control over the property for as long as you need it.

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Debt Issues

While deeding property to another places it within the reach of that person's creditors, not deeding it to them leaves it within the reach of yours. Advancing age and complex health problems bring on the possibility of crippling medical bills and the lawsuits that can arise when one does not pay them. By deeding property to a loved one as part of an orderly estate plan, one can reduce the possibility of the land being seized and sold by judgment creditors due to unpaid medical bills. Keep in mind, however, that laws enacted by every state regarding fraudulent transfers can restrict your ability to do transfer property in anticipation of litigation.

Long-Term Care

Perhaps the most compelling reason to convey property now by deed rather than later by will concerns eligibility requirements for long-term care. Currently, the federal government's Medicare program pays only for short-term care, and Medicaid exists only for those who own less than $4,000 in assets. Making gifts to family members and charities is one way to preserve one's eligibility for government assistance while making sure hard-earned assets aren't sold to pay for long-term care.

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What Is a Living Trust?


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The Advantages of a House in a Living Trust

A living trust is created by a trust deed and becomes effective while the trust grantor is still alive. During the lifetime of the trust, it is administered by a trustee selected by the grantor. A trust is revocable if the grantor retains the power to revoke it; otherwise, it is irrevocable, and its assets belong to the trust, not the grantor, for tax purposes. There can be certain advantages to putting real estate, like your home, into a living trust.

How Does a Living Trust Protect Assets?

Creating a trust to holds assets can help the grantor while he is alive and continue to serve him after his death. A living trust is created during the grantor's lifetime. It transfers title (ownership) of the grantor's property into the trust to be managed by a trustee for the benefit of a designated beneficiary. There are different types of living trusts and each can protect assets in a different way -- or not at all.

Adding an Ex-Spouse to a Deed After a Divorce

Once a divorce is finalized, the law treats ex-spouses as if they were never married to each other. Protections otherwise afforded to spouses no longer exist for the former couple. If you own property, you can add your ex-spouse as an owner of property, but doing so raises a number of potential legal problems.

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