by Phoenix attorney Christopher A. Combs, partner with Combs Law Group, P.C.
Question: I am a widow, and my husband passed away almost two years ago. I plan to continue to live in our Phoenix home, and leave this home as well as two rental houses in Chandler to my two adult children. The deeds to these three properties are currently in the name of my deceased husband and me as community property with right of survivorship. My questions are the following. One, should I change the three deeds to beneficiary deeds? Two, when I die, will there be a 100% step-up in basis of my Phoenix home as well as the two rental houses in Chandler so that no taxes will be owed? Three, when I record the beneficiary deeds to my two adult children for all three properties, is it necessary to delete the previously recorded deeds on the three properties?
Answer: One, you do not need to “change” the current deeds on the three properties to beneficiary deeds. You can simply now execute and record three beneficiary deeds to your two adult children. These beneficiary deeds will not go into effect until your death. Two, upon your death, there should be a 100% step-up in basis on all three properties, including your Phoenix home. The result will be that, if your two adult children sell all three properties after your death, there should be little or no capital gain taxes owed. Three, after you record the beneficiary deeds on all three properties to your two adult children, it is not necessary to “delete” the previous recorded deeds. As I said above, the beneficiary deeds will only become effective upon your death.
12 responses so far ↓
1 Christine Ashley // Nov 2, 2006 at 10:41 am
Does a beneficiary deed have to be recorded? Can’t I just have it in my safety deposit box, and my heir could then have it recorded?
2 John L. Wake // Nov 2, 2006 at 1:17 pm
Christine,
I don’t know the answer but here’s a great page on Arizona beneficiary deeds, http://www.keytlaw.com/az/benedeeds.htm that probably answers your question.
John L. Wake
3 Nancy Waters // Mar 30, 2007 at 5:33 pm
My Mother and Father had a Beneficiary Deeds drawn and recorded with only my name on the deed. My Mother passed in 2005 and my Father 2/2007. I am left here with a Beneficiary Deeds and not quit sure of what I have. So I would like to ask you a couple of question if I could.
1. At the time of death (was the house automatically mine? 2. Is there anything that I need to do to show proof of ownership? 3. Do I have the right to keep other family members of trying to move their way into the house?
If you could please assist me in this that would be great. I have been dealing with my Fathers death entirely on my own with no help from other family members, so needless to say I am going pretty nuts.
I can look up my Deed on maricopa.gov, so if you would like you could look it up that way you know what I have.
Thanks,
Nancy Waters
p.s. My Parents names were Carl and Hester Waters
4 John L. Wake - Realtor // Mar 31, 2007 at 9:04 am
I think your questions Arizona beneficiary deeds will be answered here.
http://www.keytlaw.com/az/benedeeds.htm
If that doesn’t do it, contact me again.
5 Marit Prouse // May 25, 2007 at 8:15 am
My husband passed away on 3/1/07. We have a Trust and I am the Trustee. I read somewhere that if I sell my home this year I can still claim the $500,000. tax benefit. If I wait til next year, it will be have of that. I need something in “black and white” so I know selling my home would be beneficial.
6 John L. Wake - Realtor // May 25, 2007 at 1:28 pm
Marit,
This has got to be a tough time for you. My condolences.
Your idea is right according to what I know but you should contact your lawyer or accountant to make sure since I’m not a tax expert.
I can refer you to a lawyer if you like.
7 wanda // Nov 20, 2007 at 5:13 pm
I need to speak an attorney concerning a beneficial deed i need filled out
8 John Wake - Real Estate // Nov 20, 2007 at 9:35 pm
wanda,
Here are some Arizona real estate attorneys. http://www.arizonarealestatenotebook.com/2007/09/06/arizona-real-estate-lawyers-attorneys/#more-1266
John
9 James Fenton // Jan 9, 2008 at 4:52 pm
How do I change a title listed “1/2 - 1/2″ to a single party after one party is deceased? Thank you.
10 John Wake - Real Estate // Jan 9, 2008 at 5:43 pm
That’s a deep subject. You should talk to a real estate lawyer.
http://www.arizonarealestatenotebook.com/2008/01/09/arizona-real-estate-attorneys-lawyers/#more-1718
11 Marvin // May 19, 2008 at 4:41 pm
Is there such a thing as a beneficiary title for personal property here in AZ?
12 John Wake - Real Estate // May 19, 2008 at 4:49 pm
Marvin, In comment #4 there is a link to a great page about beneficiary deeds. I’ve never heard them being used for personal property but I don’t know if they can be.
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