{"id":6143,"date":"2024-11-26T10:12:45","date_gmt":"2024-11-26T15:12:45","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=6143"},"modified":"2024-11-26T10:12:48","modified_gmt":"2024-11-26T15:12:48","slug":"time-for-an-estate-planning-review-check-for-9-common-deed-mistakes","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/time-for-an-estate-planning-review-check-for-9-common-deed-mistakes\/","title":{"rendered":"Time for an Estate Planning Review? Check for 9 Common Deed Mistakes"},"content":{"rendered":"\n
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Creating an estate plan is a wonderful thing to do for your loved ones. And it\u2019s actually never too early to do your estate planning<\/a>. Every homeowner should be confident that their intentions will be carried out, according to clear, effective documents.<\/p>\n\n\n\n

So, let\u2019s briefly go over nine common mistakes to look out for when starting or reviewing an estate plan.  <\/p>\n\n\n\n\n\n\n\n

1. Never Made a Plan? Mistake #1!<\/h2>\n\n\n\n

Some people don\u2019t start \u2014 either because they don\u2019t wish to think about death, or because they\u2019re anxious about making mistakes.<\/p>\n\n\n\n

We hope this article inspires some of you to get in the mindset to sit down and make a plan. Or, to update the plan you\u2019ve already made.<\/p>\n\n\n\n

2. Forgot to Update Your Estate Plan? Whoops!<\/h2>\n\n\n\n

Look over your home\u2019s deed, your Last Will, beneficiary deeds<\/a>, and any estate-related documents every five years. And always do it when something happens that significantly changes your assets, or where you\u2019ll want them to go after you pass on.<\/p>\n\n\n\n

If you sell a house that you had willed to someone, do not<\/em> cross out the address on your Last Will. The simplest way to update your Last Will is to formally amend it. Known as a codicil<\/em>, your amendment must be notarized the same way your Last Will was, and the documents should stay together.  <\/p>\n\n\n\n

Finally, be sure to let a trusted loved one know where your documents are and how to retrieve them.<\/p>\n\n\n\n

3. Leaving a Deed Unrecorded? Uh Oh.<\/h2>\n\n\n\n

Recording a deed means filing it publicly with the home\u2019s county Recorder of Deeds. A buyer doesn\u2019t have to record a deed to make it legitimate, but recording is important to help keep the title clear and avert confusion.<\/p>\n\n\n\n

Don\u2019t leave an unrecorded deed around for someone else to record later. That\u2019s a recipe for disputes after you\u2019re gone.<\/p>\n\n\n\n

Claims can affect the wrong people when the current owner\u2019s name doesn\u2019t appear in the records.<\/p>\n\n\n\n

Pro tip: Find out if the state you and your beneficiaries live in collects estate tax, and how much you can pass without creating a tax liability in the <\/strong><\/em>inherited home<\/em><\/strong><\/a>.<\/strong><\/em><\/p>\n\n\n\n

4. Didn\u2019t Review Your Deed for Accuracy? Check It Again.<\/h2>\n\n\n\n

Review the language of your deed. Be sure it meets the state\u2019s legal requirements.<\/p>\n\n\n\n

Remove potentially unclear terms<\/a> from the title. When you\u2019re simply clarifying, a corrective deed will suffice. Record it with the current (imperfect) deed.<\/p>\n\n\n\n

The added correction takes care of potential concerns about a deed. The title company or a real estate attorney can easily handle these minor fixes. Do <\/em>inform the mortgage company (if applicable) and your insurance agent of any new filing. You don\u2019t want to take your insurer by surprise, or fall afoul of its rules.<\/p>\n\n\n\n

5. Putting Your Child\u2019s Name on the Deed? Think Twice!<\/h2>\n\n\n\n

Parents sometimes put their adult child\u2019s name on the deed because they think it\u2019s a safe, sure, and cheap way to transfer property. But you give your kids a set of ownership rights by naming them on the deed. And your kids\u2019 financial lives could now have an impact on your home\u2019s title.<\/p>\n\n\n\n

Also, allowing adult children to inherit the home later preserves a tax break on capital gains in the home\u2019s value. There are other tax impacts involved in transferring a deed rather than bequeathing it, so be sure to speak with your accountant on this one.<\/p>\n\n\n\n

6. Thinking the Kids Want What You Do? You Know What Assume Means\u2026<\/h2>\n\n\n\n

Talk about what you\u2019re doing that impacts your family and friends. This way, you can be sure you\u2019re on the same page, and reduce the likelihood of tensions and misunderstandings later on.<\/p>\n\n\n\n

Some parents deed homes into trusts so their kids accomplish certain things to get their inheritances. This is informally known as <\/strong><\/em>dead-hand control<\/em><\/strong><\/a>.<\/strong><\/em><\/p>\n\n\n\n

Some parents use the testamentary trust<\/em> method to control their beneficiaries\u2019 actions through their Last Wills. Are you stipulating that certain assets shall be distributed if and when your children act (or interact) in specified ways? Be careful not to set up future disputes.<\/p>\n\n\n\n

7. Forgot to Make the Will Match the Deed? Whoops!<\/h2>\n\n\n\n

This is a common error. If your Last Will contradicts your deed language<\/a>, then which has the last word? The deed has that super power.<\/p>\n\n\n\n

If you and a co-owner hold a deed with rights of survivorship<\/em>, you can\u2019t just will your co-owner\u2019s property interest away. Your deed is going to bypass probate, as your co-owner automatically gets your interest.<\/p>\n\n\n\n

Property deeded to co-owners as tenants in common<\/em>, in contrast, does go through probate, and your Last Will rules.<\/p>\n\n\n\n

8. Adding Others to Your Deed? Know the Drawbacks. <\/h2>\n\n\n\n

As we just saw, a right of survivorship on the deed lets property pass straight to a co-owner. No need for probate or other legal documents. Many people re-deed their homes to themselves along with others who have rights of survivorship. Doing this can:<\/p>\n\n\n\n