On this page:

• Joint property ownership with survivorship rights
• Beneficiary deeds
• Pay-on-death designations
• Transfer-on-death designations

Several techniques are available under Missouri law that enable a person to transfer property to a specific person or persons upon death without a will or trust. For people with small estates, the careful use of these techniques can serve as the sole estate plan and avoid any need for probate. Persons with larger estates should consider using these techniques in conjunction with a will or trust.

Joint property ownership with survivorship rights

In the past, the most common technique for bypassing probate and passing property upon death was some form of joint property ownership with right of survivorship. While this technique can still be used, other, more modern techniques covered in the following sections may be more appropriate in particular situations.

The two most common forms of joint ownership allowing direct passage of property upon death were and are:

• Tenancy by the entirety: If properly titled upon acquisition, property jointly owned by a husband and wife is held by them as “tenants by the entirety.” The legal effects are:
  • Neither spouse can dispose of the property without the consent of the other.
  • Upon the death of one spouse, ownership of the entirety of the property automatically passes to the surviving spouse.
  • Creditors who obtain a judgment against only one spouse cannot collect the judgment by seizing property held in a tenancy by the entirety.
• Joint tenancy with right of survivorship: This is a form of joint ownership allowing for survivorship rights between or among two or more people not necessarily related as husband and wife.
  • The legal effect is that the last surviving joint owner automatically receives full ownership of the property.
  • The primary difference between this and a tenancy by the entirety is that joint tenants can “sever” a joint tenancy by selling or giving away their interests.

Both a tenancy by the entirety and joint tenancy with right of survivorship should be distinguished from a tenancy in common, which is the ownership of property by two or more people without any right of survivorship. Upon the death of a tenant in common, the decedent’s share of the property does not pass to the surviving co-owners but rather passes according to the decedent’s will or the intestacy statutes.

Some common forms of property that can be held in a tenancy by the entirety or joint tenancy with right of survivorship are real estate, motor vehicles and bank accounts. Actually, with proper documentation, almost any type of property can be held in a tenancy by the entirety or joint tenancy with right of survivorship.

It is important to note that property held in a tenancy by the entirety or joint tenancy with right of survivorship automatically passes to the surviving co-owner or co-owners without being affected by the owners’ wills or the intestacy statutes and without being subject to any probate procedure. Therefore, if a person desires that his or her will or trust control the disposition of assets, it may be necessary to re-title property held in a tenancy by the entirety or joint tenancy with right of survivorship.

Following are some of the advantages of using tenancies by the entirety and joint tenancies with right of survivorship:

• Because property passes to the surviving co-owner or co-owners automatically, there is no need for probate administration. Usually, only a death certificate is needed to further deal with the property.
• Joint bank accounts offer a married couple convenience and flexibility because funds are immediately available if one spouse dies or becomes incapacitated.
• Such tenancies are particularly suited to ownership of family residences, especially when a surviving spouse wants to continue living in the home.
• Joint ownership of real estate in other states – such as vacation homes – is advantageous because it will avoid the need for an ancillary probate proceeding in the other state when a co-owner dies.

Some disadvantages of tenancies by the entirety and joint tenancies with right of survivorship include:

• Loss of exclusive control over the property
• Possible difficulty in disposing of the property or obtaining loans using the property as security
• Serious legal problems and an increase in the cost of probate if both joint owners die in a common accident or disaster and it cannot be determined who died first
• Costly and cumbersome conservatorship proceedings if minors or legally disabled adults are surviving co-owners
• Disagreements between co-owners, which may necessitate costly and time-consuming litigation
• Possible loss of the property if there is a judgment against another co-owner or another co-owner takes bankruptcy
• The right of any co-owner of a bank account to withdraw all funds in the account (sometimes even family members have been known to withdraw all funds from accounts contrary to the intent of the person who originally owned the funds)

In view of these disadvantages, persons planning their estates may want to consider the newer techniques discussed in the following sections.

Back to top

Beneficiary deeds

Real estate (land, and buildings thereon) can now be transferred on death to one or more specific beneficiaries by signing and filing with the Recorder of Deeds a document called a “beneficiary deed.” Such a deed takes priority over a decedent’s will and the intestacy statutes.

A beneficiary deed simply specifies that upon the death of the land owner, or all owners if there is more than one, the land will pass automatically to the person or persons named as beneficiaries in the deed.

Advantages of beneficiary deeds as compared with joint ownership include:

• The original owners retain full control over the real estate during their lifetimes and, if necessary or desired, can sell or mortgage the real estate without the consent of the beneficiaries named in the beneficiary deed.
• A beneficiary deed can be revoked at any time by filing a revocation with the Recorder of Deeds.
• A replacement beneficiary deed naming new or additional beneficiaries can be filed at any time.

Back to top

Pay-on-death designations

It is possible under Missouri law to put a “pay-on-death” (POD) designation on bank and certain investment accounts. POD designations also can be changed from time to time as desired.

The legal effects of a POD designation are:

• The original owner or owners of the account retain full ownership and control of the account during his, her or their lifetimes. They can totally dispose of the account if they wish without the consent of the beneficiaries.
• The beneficiaries of the POD designation have no control over the account, nor any right to withdraw funds, until the death of all owners.
• Upon the death of all owners, the beneficiaries named in the POD designation will receive all monies left in the account at that time.
• The passage of ownership upon the death of all original owners is independent of the owners’ wills and the probate process.

Back to top

Transfer-on-death designations

Certain assets may be titled with “transfer-on-death” (TOD) designations. As with POD designations, TOD designations can be changed from time to time as desired.

The legal effects of TOD designations are similar to POD designations:

• The original owner or owners of the titled asset retain full ownership and control of the asset during his, her or their lifetimes. They can completely dispose of the asset if they wish without the consent of the beneficiaries.
• The beneficiaries of the TOD designation have no right to control over or ownership of the asset until the death of all owners.
• Upon the death of all owners, the beneficiaries named in the TOD designation will receive full ownership of the asset.
• The passage of ownership upon the death of all original owners is independent of the owners’ wills and the probate process.

Examples of property that can be titled with a TOD designation are motor vehicles and corporate stock. It should be noted, however, that while Missouri law authorizes corporate stock to be issued in TOD form, it does not require corporations to do this, and some corporations have internal policies that do not permit the issuance of stock with TOD designations.

Back to top

Copyright © Scott Law Firm Professional Corporation