How to Transfer Property After a Death
You must prepare a will so that your property is transferred according to your wishes. If you fail to have a valid will, then the state likely will distribute your property after you die. The state will transfer your property to family members recognized under state law (e.g., daughter rather than step-daughter). If you do not have family members that meet your state's requirements, then your property will escheat to the state.
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Instructions
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Review your state's regulations. For instance, community property states, such as Arizona, Idaho, Louisiana, New Mexico, and Texas, hold that a property or earnings obtained during the marriage are equally owned in undivided interests among the spouses. Neither you nor your spouse can independently transfer property after death. You must obtain permission or consent, unless the spouse has died.
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Itemize or catalog your property. For example, if you own different real estate, obtain the legal description for each property. You can contact the county recorder of deeds where your property is located to get a description if you cannot access your deed.
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Prepare a valid will so that your real and personal property is transferred upon your death. Real property includes land and related improvements, such as fences and trees. Personal property refers to intangible or tangible, moveable items like furniture, art, stock certificates, and money.
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Establish a trust so that a trustee, usually a third party, manages your property. The trust divides your property into two separate legal interests. The trustee maintains legal title, such as to make decisions, while the beneficiary (e.g., family member, non-profit), receives equitable title. The trustee must manage the property in the best interest of the beneficiary.
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Consult with a trust or estate attorney to ensure that the will or trust is properly executed (e.g., correct number of witnesses and signatures -- varies by state) and recorded. Also contact a certified financial planner or accountant to evaluate the tax consequences of your transfer decisions. For example, the person that receives your property might be subject to a federal gift tax or eligible for a gift tax exemption.
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Transfer property using a contract, such as a life insurance policy. You can select a person or organization as your beneficiary, which the insurance company recognizes and pays directly upon your death. Carefully understand any contractual restrictions. For instance, the insurance company might consider the contract void or invalid if you commit suicide or if your beneficiary has no legal status in the United States.
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Tips & Warnings
Common estate terms include testate, which means that you died with a valid will, and intestate, that you died without a valid will.
Do not wait until you collect retirement benefits to draw up a will. You can prepare a will today and amend or revoke it in the future. Instead of waiting until after you die, you can transfer property before death, through an inter vivos conveyance or a gift causa mortis.
