What You Should Know About the Latest Changes to Deeds Upon Death
The Deed Upon Death (also known as a “Transfer on Death Deed”) is a method of transferring real estate to your loved ones upon your passing without having to go through probate. If the property owner executed a Deed Upon Death, the family member contacting you about selling the property may not be the designated beneficiary and as a result, have no authority to proceed with the sale.
Therefore, it’s always important for you to know how to determine if there is a deed upon death recorded as well as determine the identity of the beneficiary.
Before Recent Legislation.
While the Deeds Upon Death enables families to avoid time-consuming and expensive probate proceedings, a significant disadvantage in the past was that the property could not be sold for 18 months after the death of the owner.
Nevada law allows any creditor of the decedent to pursue the recovery of real estate for a period of 18 months after the date of death. As a result, title companies would not issue a policy of insurance until the 18-month period expired and claims against the decedent were barred.
A Better Way.
With the passage of Assembly Bill 414, the usage of Deeds Upon Death is likely to be more common as an effective part of an estate plan.
For the decedent’s passing after July 1, 2021, the time period for creditors of an insolvent estate to pursue recovery against the real estate will be reduced to 90 days, provided that the beneficiary of the Deed Upon Death issues a creditors notice of the decedent’s death which advises that any claim after 90 days of the first publication of the notice will be barred.
If the creditor does not file a claim within this period, any claim against the decedent can no longer be made against the property transferred pursuant to the deed upon death and the beneficiary under the deed is authorized to sell or distribute the property without personal liability.
The new legislation specifically provides that “a title company that is engaged regarding the transfer of the property identified in a deed upon death may recognize that the notices…constitute adequate notice required by law”.
These changes will result in more frequent use of Deeds Upon Death and have created an opportunity for licensees dealing with family members that were frustrated with the previous waiting periods.
If you are interested in learning more about Deeds Upon Death, please don’t hesitate to contact us to hear about the next presentation of our free one-credit continuing education class about this topic.