The Transfer on Death Deed
The goal of estate planning is often, not always, to avoid having to go through a Court supervised probate with the proper use of estate planning. The Transfer on Death Deed is one of the tools an experienced Wyoming estate planning attorney can use to help avoid a Court supervised probate. The legislature enacted Wyoming Statutes §§ 2-18-101 through 2-18-106 in 2013, thereby authorizing the use of properly drafted, executed, and recorded Transfer on Death Deeds to convey real property in Wyoming.
The Transfer on Death Deed allows an owner (or owners) of real property to transfer the property upon the owner’s death without having the property become part of the owner’s estate. This can help keep the total value of the estate below the $200,000.00 threshold that requires a Court supervised probate.
What if I change my mind about who to give the property to? One of the best benefits of the Transfer on Death Deed is that that you, the grantor, can revoke it at any time prior to your death. Wyoming Statute § 2-1-105 provides the form to revoke the Transfer on Death Deed and once the properly drafted revocation is recorded with the County Clerk, the transfer is revoked.
If you have a mortgage, can you still use a Transfer on Death Deed? In almost all cases, the answer is yes. The reason is that the Transfer on Death Deed can only transfer the owner’s interest in the property, so when the property is transferred to the new owner, it will still be subject to the mortgage. The same is true for other common encumbrances on real property like road easements, utility easements, and CC&Rs. It’s important to remember that you can only transfer the interest you have in the property with the Transfer on Death Deed. You cannot use a Transfer on Death Deed to try and remove an easement or other encumbrance on the property.
What if you do not want the property that has be transferred to you? It is a rare situation, but one can easily imagine a situation where taking a property would be a bad idea. Imagine if your long-lost Uncle Albert transferred an old gas station to you that was worth $250,000.00. Sounds great, but what if the station has leaky underground fuel tanks that need $1,000,000.00 of reclamation work done? You would not want that property! Fortunately, Wyoming Statute § 2-18-106 allows you to “refuse to accept all or any part of the real property interest conveyed by a transfer on death deed.” If you find yourself facing a situation like this, you need to talk to an experienced Wyoming estate planning attorney right away.
Are there potential tax benefits and/or consequences when using a Transfer on Death Deed? The answer is yes, and that is why is critical to consult with an experienced Wyoming estate planning attorney before attempting to use a Transfer on Death Deed. An accountant may sometimes also be needed to ensure that the complete tax benefits and/or consequences are understood and planned for before recording a Transfer on Death Deed. In the wrong hands a Transfer on Death Deed can cause a lot of problems, but with the assistance of an experienced Wyoming estate planning attorney it can be a great tool to help avoid a Court supervised probate, help with taxes, and streamline the entire estate process. Contact Wyoming estate planning attorneys at Davis, Johnson & Kallal today and begin putting your estate plan together today.