Types of Deeds in Arizona
Read this article to learn about the types of deeds in Arizona.
A Deed is the legal document that transfers ownership of real property from one party to another. There are different types of deeds in Arizona. To be valid, a Deed must be executed according to the Arizona Revised Statutes Title 33. The Deed must be in writing, must be signed by the Grantor, and must then be recorded at the County Recorder’s office where the property is located. There are many other requirements for Deeds, such as disclosure requirements, that we will not address here. There are also different ways to take title to a home, such as Tenancy in Common, or Joint Tenancy with Rights of Survivorship. While we will not cover these topics today, please know that these are important terms and that different types of Deeds and the different ways in which you can take title have significant effect on your rights and ownership. We recommend speaking with an experienced estate planning attorney if you have the need to prepare and file a Deed.
In our practice, we are often asked about Deeds and the related laws. Deeds are just one part of a complete estate plan. Among the many types of Deeds that are used in estate planning, this article will address Warranty Deeds, Beneficiary Deeds, and Quitclaim Deeds.
A Warranty Deed is the best type that a purchaser of property can get. In this Deed, the Grantor, or the person that is transferring the property, is warrantying that they own the property free and clear without liens or encumbrances. They are warrantying these items even from before they owned the property. They are financially backing this assertion. This provides great peace of mind to a potential purchaser but can also associate liability with the Grantor. For this reason, Title Insurance is often recommended along with this warranty.
While this option is great during the sale of real property, this usually isn’t necessary for estate planning purposes. Most of the time, we will use a quit claim Deed or a beneficiary Deed to transfer property, as most of the time we are not involved in the sale of property. Sometimes we will use a special warranty Deed, which is a type of warranty Deed that specifically warranties only a partial aspect of the rights or tenants of ownership. This has its place and time for use, and it is important to discuss your options with an experienced attorney.
Beneficiary Deeds are often used in lieu of a trust and are sometimes referred to as Transfer on Death Deeds. A Beneficiary Deed is a way of transferring your real property without having to go to court, so long as the Deed is property executed. This type of Deed does not become effective until you pass away. For example, let’s say that John Smith owns a home in Chandler, Arizona. He doesn’t want to give this home directly to his son, James, because John still wants to own and live in the home. He may even want to sell the home someday or rent it out if he purchases a new home and keeps his Chandler home. If John doesn’t have any estate planning, or if he is using a will-based estate plan, it may be to his benefit to execute a Beneficiary Deed for probate avoidance. If his Beneficiary Deed is properly prepared and executed and it lists his son, James as the beneficiary, then once John passes away his interest in the home will automatically pass to James, without having to go through the probate process. All James would have to do is execute an Affidavit of Death and provide a death certificate, and he would now be the legal owner of the home.
Because this Deed is not activated until death, John would have the option to revoke this Deed before he passes away. He may decide that a trust based estate plan is necessary for him. In that case, we would revoke the Beneficiary Deed and execute a different Deed that transfers his interest to his new trust. Or if John decided instead that he wants to sell the home after he has already executed the Beneficiary Deed, John would have no trouble revoking the Beneficiary Deed and executing a Warranty Deed to sell the home.
In summary, this can be an excellent tool to avoid probate, but there may also be different options for you with regard to estate planning. Beneficiary Deeds can also have downside, particularly if you have many beneficiaries, or multiple properties.
A Quitclaim Deed is the most common Deed used for estate planning purposes. Rather than warrantying that a Grantor owns a property free and clear of any encumbrances, a Quitclaim Deed simply transfers what the Grantor owns, if they own any part of the property. This Deed basically says “if” I own this property, I transfer all rights that I own in it to this other party, known as the Grantee.
This is a great option for Estate Planning purposes. Once we prepare a trust for our clients, the next step is to fund the trust. By executing a Quitclaim Deed, we can ensure that the large asset is property funded to the trust. Because it is properly funded to the trust, we can avoid probate on that asset. Our firm will often include the execution of at least one Deed with our estate planning packages, and we can include multiple executed Deeds for a modest fee.
While there are many types of Deeds, we will generally only worry about the above listed Deeds in Arizona for Estate Planning purposes. Different states also have different other types of Deeds, so it is important to speak with an attorney that can advise you on these items. If you own property outside of the state of Arizona, and you have an existing estate plan or you hire us to develop a new estate plan for you, then you will need to hire a title company or attorney in the county and state that you own the property to execute a Deed to transfer ownership of the property to your new trust. Our Attorneys are licensed in Arizona, Colorado, North Dakota and Minnesota. we can help you with deeds for these 4 different states.
As mentioned above, Deeds are just one aspect of a complete estate plan. Whether you rely on a beneficiary Deed to avoid probate of your asset, or you create a trust to avoid probate, you will need experienced guidance. The attorneys at Citadel Law Firm can help. Please click here to schedule a free case evaluation and to speak to one of our attorneys about your unique circumstances. If you prefer you can call (480)565-8020, the estate planning and probate attorneys at Citadel Law Firm will be pleased to help you.
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