Transfer on Death: Transferring Property - YouTube

Welcome again to the Melling Law YouTube Channel where we're starting off our video series about transfers on death.

Today, we are talking about specifically transferring real estate upon death. Now in many states, actually not too many, it's not even a majority,

but still, in a good deal of states, you can do what's called a transfer on death deed, and what that does is it allows you

to transfer your property upon death, but still, make that transaction during your lifetime. For example, instead of transferring a deed

to somebody to give them a piece of property during your lifetime and having them receive it during their lifetime, you just

record what's called a transfer on death deed meaning you've signed the property to them, but they have to present the county

with a death certificate to be able to actually have that title best to them and be able to have control over the property or to sell it

or make improvements upon it. There are a lot of reasons why people do this. Number one is for tax purposes

if it's transferred upon death, they get that step up in basis, as if they've for tax reasons if the recipient were to sell it later on,

it's as if they had bought it for fair market value as of the date of your death, instead of if you were to gift it, they would have to pay taxes

as if they had purchased it at whatever you had received it. So if that property has appreciated in value over the last several years,

that's definitely reason why you would want to transfer it on death. But the other reason is because people don't want to go through the expense

of doing a proper estate plan and setting up a trust, but they still want to avoid that probate process, which is the court-supervised process

to dispose of real estate and other types of assets. In these other states, these transfers on death deeds do have their place.

But there are a lot of pitfalls with them, as well. They don't quite work as intended all the time, and they do open people up to fraud

and there's a whole bunch of other reasons why we don't like transfer of death deeds necessarily, and why Utah has not passed

a transfer on death deed act. We have not authorized those within the state of Utah. So in Utah, a transfer on death is going to happen

one of three ways. Either you have no estate plan in place, no will or anything, and you have property in your name.

That transfer has to be to your heirs of law, because you don't have a will, so it's whoever by law is entitled to receive your property,

that transfer has to be supervised by the courts through the probate process. That process can be pricey and takes at least

four months, and oftentimes more. So in Utah, if you have property and it's in your name and you don't have a will, that's what happens.

Now if you have the property in your name and you do have a will, the process to get the property into the names of your loved ones

is exactly the same, the only difference being that the will dictates who receives the property instead of state law. So the state law for example,

if you are married and your spouse has passed away and all your children are still living, your children would receive equal shares of that

if your spouse is still living but some of those children are not also children of your spouse, then there's a different formula for that

to split some of that between your spouse, some of it between your children. When you have a will, you do away with all of that

and you are able to do what you want with a few exceptions, and we'll cover that in other videos. Finally the third way

that we transfer property real estate upon death in Utah is through a living trust. So rather than having the real estate in your name,

the trust is going to be the thing that holds your real estate. It's held in the trust's name. Now you can control that during your lifetime.

You can sell that property through the trust as trustee, you can give the property back to yourself and sell it personally,

whatever that may be, you control it, but then after you've passed away, your trustee, your successor trustee, the person who you've said you want

to manage your affairs, that person is going to be able to sign as trustee and sell without any court supervision whatsoever.

So in Utah what that process looks like is your successor trustee goes to a title company, they show the title company

the trust, the title company reviews it, makes sure that it's compliant with their internal regulations and procedures,

and as long as everything looks to be above board, they are able to draft a very simple policy to make sure that your trustee can just sign for that

and sell the property. So transfers on death in Utah happen one of those three ways, either through the probate court

with the court supervision according to state law, or if you have a will still through the probate court, but it's distributed

according to your wishes, and then finally through a living trust which doesn't require any court supervision at all, and just has you

and your successor trustee sign as if they were you, essentially. So thanks for watching. If you have any other questions

about transfers on death or other estate planning questions, feel free to give us a call at any time.