Oregon recently enacted Senate Bill 815, the Uniform Real Property Transfer on Death Act, which is effective January 1, 2012. The Act allows people to transfer real property (a.k.a. real estate) to beneficiaries using a Transfer on Death Deed, which is recorded while the transferror is still living, but does not take effect until after the transferror's death. The Act is a great opportunity for many people, but comes with many dangers as well. As always, the key to the effective use of any estate planning tool is to get competent legal advice as to its effectiveness! Here is a (non-exhaustive) list of some of the possible benefits and issues that these new deeds come with:
- Great way to leave a piece of property to an adult child who lives in the home already;
- Avoids probate if done effectively;
- Avoids the numerous problems that arise from granting joint ownership during your lifetime;
- Offers a way for grantors of a revocable living trust to keep title in their names during their lifetime, but transfer the property to their trustee only after their death (usually for ease of refinance and sale of the property).
- People may have a false sense of security, even though they have not received competent legal advice on the benefits and drawbacks to executing this type of deed;
- The statute of limitations for claims against the property by creditors under the Act is 18 months, instead of the 4 months allowed in probate proceedings;
- Property may not be able to be sold until 18 months after the death of the grantor because of title insurance problems;
- If title insurance is available, the premiums may be much more expensive;
- The deeds may end up costing more in legal fees because of attorney time spent answering questions that multiple benficiaries and their attorneys may have;
- Since the deeds lack the formalities required by wills, there is a potential for fraud;
- If there are multiple grantees, huge problems can arise if they do not get along and have the same goals for the property, or if any grantees have creditor or divorce problems;
- The grantor may not specify any personal goals for the future of the property;
- The grantor must validly execute a new instrument to revoke the Transfer on Death Deed;
- If there are joint grantors, a surviving grantor may revoke the deed after the other has died, which may be inconsistent with the deceased grantor's wishes and intentions.
Again, the key to the effective use of any estate planning tool is to get competent legal advice as to its effectiveness!
To your family's health & prosperity,
P.S. Want to get started on the most important planning you'll ever do for your family? Give our office a call at (503) 235-5150 to get started. You'll be glad you did.