Monday, June 30, 2014

Transfer on Death Deed available in WV

As of June 5, 2014 West Virginians have a new way to transfer real estate to a death beneficiary without having to go through probate. The West Virginia Transfer on Death Act passed the legislature in the 2014 regular session and became effective 90 days after it was signed by the Governor.

The new law allows an owner to do a deed naming a Transfer on Death beneficiary, and at the owner's death the property passes directly to the beneficiary like it would to a joint tenant. But it's very different from joint tenancy because the beneficiary under a Transfer on Death deed gets no current interest in the property. The interest only transfers at the death of the owner. The owner still retains all his or her ownership rights, including the right to revoke the deed, or transfer or encumber the property.

One important difference between this kind of deed and others is that it must be recorded at the courthouse during the owner's lifetime to be valid. Other deeds must merely be properly executed, and can be stashed in a drawer and still be valid.

This kind of deed is generally much better for a senior who wants to keep all rights and ownership of his or her own home for life, but wants to pass the property to a beneficiary after death while avoiding both probate and Medicaid estate recovery (though it won't necessarily avoid a TEFRA lien).

Many a senior who has deeded away a joint interest or remainder interest and kept only a life estate in her home has come to regret it when she realizes she is no longer the sole owner of her property, and cannot sell or borrow against the property because of problems with the joint or remainder owners. She has given away part of the ownership of her greatest asset without realizing how it could negatively impact her future choices.

You can read the the new statute at WV Code ยง36-12-1, et seq. www.legis.state.wv.us/Bill_Status/bills_text.cfm?billdoc=SB3%20ENR.htm&yr=2014&sesstype=RS&i=3

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