Non-Probate Transfers Missouri

1. 12/18/2011 Rural & Agricultural Law, Ag Econ 3257 1 Non-Probate Transfers(Missouri) Right-of-Survivorship Co-owned Property Living (�inter vivos�) Trusts Life Insurance (paid directly to beneficiaries) Beneficiary Deeds (1989) Transfer on Death (TOD) (1989) Payable on Death (POD) (1989)

2. 12/18/2011 Rural & Agricultural Law, Ag Econ 3257 2

3. 12/18/2011 Rural & Agricultural Law, Ag Econ 3257 3 Beneficiary Deed (BD) to Pass Real Property Ownership Conveys land title when grantor dies Deed must be recorded before grantor dies Beneficiary must survive the grantor Exception #1: If the beneficiary dies and was related to the grantor, then the BD goes to the beneficiary�s descendants (LDPS = Lineal Descendants Per Stirpes), UNLESS the BD specifically states �no LDPS�. Exception #2: If the beneficiary dies but was NOT related to the grantor, then the BD does NOT go to the beneficiary�s descendants, UNLESS the BD specifically states �with LDPS�.

4. 12/18/2011 Rural & Agricultural Law, Ag Econ 3257 4 Lineal Descent Per Stirpes The term "per stirpes" is a Latin term meaning to take by representation. It denotes a method of dividing a legacy or inheritance or transfer whereby a class or group of distributees take the share that their deceased ancestor would have been entitled to. In other words, they take by their right of representing such ancestor and not as so many individuals. For example, assume that Tom has two children, James and Mary. James is living and has one living son. Mary is deceased but has two living daughters. If Tom leaves his estate to his descendants, per stirpes , then Tom's estate would be distributed equally to members of the class of descendants that is closest to Tom in kinship. In our example, that would be James and Mary since they are both Tom's children. Since Mary is not living upon Tom's death, her share of the estate passes to her children in equal shares; i.e., they step into Mary's shoes and take her share. In this example, James would take 1/2 of the estate and Mary's two children would divide her share equally. In other words, James would receive 1/2 and Mary's daughters would each receive 1/4.

5. 12/18/2011 Rural & Agricultural Law, Ag Econ 3257 5 Lineal Descent Per Capita The term "per capita" is a Latin term meaning "for each head." It is often used in wills and trusts to indicate that each of the named beneficiaries should inherit equal shares of the estate. For example, assume that Tom has two children, James and Mary. James is living and has one living son. Mary is deceased but has two living daughters. If Tom leaves his estate to his descendants, per capita, then Tom's estate would be divided equally among James, James' son, and Mary's two daughters. Each would receive a 1/4 share of the estate.

6. 12/18/2011 Rural & Agricultural Law, Ag Econ 3257 6 Revocation of a Beneficiary Deed Recording a revocation with county recorder�s office Deeding the property to another person (by sale or gift) A WILL cannot change or revoke a beneficiary deed UNLESS in the BD that right is reserved

7. 12/18/2011 Rural & Agricultural Law, Ag Econ 3257 7 Transfer on Death (TOD) for Personal Property�� Stocks, bonds, equipment, livestock, grain,� right to receive payment under contract Can name more than one beneficiary and/or contingent beneficiary Can be revoked unless expressly made irrevocable Does not have to be executed with the formality of a will BUT beneficiary designation must be: Written Signed Dated Acknowledged before a notary public (notarized)

8. 12/18/2011 Rural & Agricultural Law, Ag Econ 3257 8 Payable on Death (POD) for Bank Accounts (Checking, Savings, CDs) Beneficiary�s right to withdraw funds does NOT arise until after the grantor�s death POD accounts pass upon the death of the grantor, unlike joint bank accounts where any named party has the right to withdraw funds before the grantor dies Advantages: Still control money in POD accounts Can be revoked at any time before the grantor dies, unless explicitly made irrevocable