Ask the Titleman™ - Beneficiary Deed; Owner Deceased

by John T. Lotardo aka TITLEMAN™
Sr. VP/General Counsel, Stewart Title & Trust of Phoenix, Inc.

Q. Thank you for taking my question regarding an issue that we are having. I have several deeds that are giving us trouble. There is a Beneficiary Deed that gives the property to it looks like all family members but not until the father passes away. Can you please just let me know if the Spouses have to sign the new deed? I would really appreciate it. It is also a non-owner occupied. I just need clarification from you since you are the “TITLEMAN”. Once again thank you so very much for helping me out.
A. Assuming that the father is now deceased, the four children would acquire the property through the Beneficiary Deed as their sole and separate property. Meaning, no deeds are necessary since they acquired the property by devise and should take it as their respective sole and separate property without a community property interest in the property.

Q. I need you to settle an argument among a few seasoned Escrow Officers. We are getting an escrow where the owner of record is deceased but he/she deeded over the property to her son 34 years ago, the deed has never been recorded. Is this deed still valid to record and convey title to her son? We understand that there may be a probate issue but the argument seems to be in the validity of the deed.
A. Yes and No (how’s that for an attorney answer). In Arizona, the critical fact here is whether the deed was ever “delivered” to the son prior to her death. The deed is required to be delivered to the grantee whether physically by handing it over or say delivered to and recorded by an escrow company as in a typically real estate transaction. It is a proof issue as well as the concern about other third parties not obtaining constructive notice of the transfer. After you delve into it a bit more, the facts may show that the transfer is valid between the mother and son, but given the time elapsing, the underwriting risk involved may require a quiet title action to put to rest any concerns of your title insurer.

The information supplied is of a general nature and should not be relied upon as comprehensive legal advice. Please consult with your own local legal counsel. To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.

Copyright John T. Lotardo. All rights reserved. John Lotardo (aka the TITLEMAN™) is Senior Vice-President and General Counsel for Stewart Title & Trust of Phoenix, Inc., and State Underwriting Counsel for Stewart Title Guaranty Company. He is a member of the National Advisory Councils for GoGetEscrow.com, GoGetLoan.com, GoGetNotary.com and GoGetRealEstate.com. The information supplied is of a general nature and should not be relied upon as comprehensive legal advice. Please consult with your own local legal counsel. For more about John, visit: www.GoGetEscrow.com/Get/Titleman or www.AskTheTitleman.com.