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Good estate planning will assure wishes are honored

Q: My 88-year old aunt died recently. She was best friends all her life with her 91-year-old sister. She told her sister numerous times that if anything happened to her that she wanted her to have her house along with her surviving brother. After her death, my aunt's estate was settled and the house was sold.

Upon researching the deed for the sale, it was discovered that the brother who preceded my aunt in death was also on the deed. The house proceeds were divided into thirds and the third portion wound up in the hands of my aunt's sister-in-law (her late brother's wife). My aunt never intended her to get any of the proceeds. Would there have been any way to reverse the deed and have the will override it?

I suspect that the answer is no. Whoever is named on the deed is an owner of the house. A will would only dictate what is to be done with the property that is owned by an individual, in this case your aunt. The fact that years earlier, someone put your uncle on the deed to the house meant that your aunt's will would only serve to distribute her share of the property after her death.

While I don't think there is much you can do now, your situation is a good example for those who don't believe it's necessary to make sure their estate is organized and tidy. If you don't plan out your estate, little things can disrupt the best of intentions. This is particularly important if you have minor children or older relatives who are dependant upon you for support.

For more details, please consult with an estate attorney.

Transfer on Death deed

Q: I am single, age 70. The only “individual” asset I have in my name is my condo in Florida, which is my principal residence. In order to avoid this asset going through probate at my demise, may I record a new deed titled as follows: “Mary J. Smith, TOD (Transfer on Death) to Mark R. Smith (son)”? I have executed stock and other assets titled as above, thus avoiding probate.

There are nine states that permit a TOD deed, also known as a beneficiary deed, to be recorded for a piece of real estate: Arizona, Arkansas, Colorado, Kansas, Mississippi, Nevada, Ohio and Wisconsin.

In these states, you can record a TOD deed that names your heir as the grantee (the owner of the property is the grantor) upon your death. You would record the deed just as you'd record a regular deed. Your heir would need a death certificate and, in some state, an affidavit, in order to complete the transfer of ownership.

The big savings: You don't have to go through probate.

You can revoke or amend the TOD deed at any time without consulting the grantee; and the grantee, since he or she doesn't own the house until your death, has no ability to borrow against the property or have it attached in a bankruptcy, for example.

And if there is an outstanding mortgage on the property, it would be transferred into the grantee name upon your death.

Since you live in Florida, I don't believe you can execute a TOD deed in order to avoid probate on the property. But if you wish in Florida, you can set up a living trust that would accomplish the same thing. In addition to being able to place your home into the trust, you could also place any other assets you own into that trust.

Normally, the trust would allow you to revoke the designation and you could take the assets out of the trust if you wished. But the trust would allow you to hold bank accounts, your home and even stock in the name of the trust. Upon your death, those items would stay in the trust but the new beneficiary would be your son. He could then sell or use those items held in the trust and he would avoid the cost of probate.

Essentially, you'd transfer the property into the name of the trust, and name your heir as the successor beneficiary of the trust upon your death.

For more details, please consult with an estate attorney.