Is a Beneficiary Deed a Good Option in Missouri?

The short answer is "Maybe." The following is an excerpt from Reg Turnbull, a well-known elder law attorney in Missouri.

"Those of us who do estate planning counsel our clients that beneficiary
deeds are not panaceas. Often the following issues arise:

1. The grantor-decedent's Creditors still must be paid. Under section
461.300, RSMO, creditors can go after transfer on death (including
beneficiary deed) transferees (beneficiaries) to get bills paid. Creditors must
force open a probate within one year of the date of death to get paid and
bring in the transferees to the extent of the bill. Thus, such transfers do
not avoid estate recovery.

2. No one is in charge. An involuntary partnership arises if the
transfer is to more than one transferee. In probate, someone takes charge to
make sure that the maintenance of the real estate continues, e.g., the
utilities get paid so the "pipes don't freeze," that the real estate is
maintained, and that the RE taxes are paid. Also if some want the property to be liquidated, then it takes all of the transferees to sell it. If
disagreement, then may have to partition.

3. Any grantor-decedent's special intent is legally disregarded.
Intents for one or some but not all of the transferee-beneficiaries to farm
the farm or to live in the dwelling requires agreement (or at least
acquiescence) of the other family members. This can result in resentment from those who want the real estate liquidated for fair market value so that each can
get his or her fair share. If disagreement, then those wanting the money
must be bought out.

4. Any issues with real estate before the TOD are not resolved and
usually get passed on to the beneficiaries.
In Missouri, many people use Beneficiary Deeds because they are obsessing
about how to avoid probate. Some people should have used trusts to avoid
probate and still have central administration of their assets with clear
responsibility to carry out intent rather than just kicking the real estate
with problems down to the beneficiaries to deal with.

In the zeal to avoid probate, many issues are not worked out in a planned
manner with the TOD-beneficiary deeds when more is needed as they arguably
would be with more directions/instructions in a will (through probate) or
trust (without probate).

When our clients ask what we think about beneficiary deeds, we tell them
that we see beneficiary deeds as options that may or may not be appropriate
depending upon the situation."