How a Beneficiary Deed Works
A beneficiary deed is one of the simplest tools for transferring Arizona real estate outside of probate. The owner signs and records a deed naming a grantee beneficiary. The deed states that it takes effect only upon the owner's death. Until that moment, the beneficiary has no legal interest in the property.
A deed that conveys an interest in real property, including any debt secured by a lien on real property, to a grantee beneficiary designated by the owner and that expressly states that the deed is effective on the death of the owner transfers the interest to the designated grantee beneficiary effective on the death of the owner.
A.R.S. § 33-405(A)The owner retains complete control. They can sell the property, refinance it, or place additional liens on it. The beneficiary's interest is subject to all encumbrances the owner creates during their lifetime. No signature, consent, or notice from the beneficiary is required. A power of attorney holder cannot sign a beneficiary deed on the owner's behalf unless the power of attorney specifically grants that authority.
A beneficiary deed is sometimes called a transfer on death deed. The deed must include a legal description of the property subject to the transfer. It can name multiple beneficiaries who take title as joint tenants, tenants in common, or community property. Personal property such as furniture or vehicles is not covered by a beneficiary deed.
Recording, Revocation, and Key Requirements
A beneficiary deed is only valid if it is recorded at the county recorder's office before the owner's death. This is not optional. An unrecorded beneficiary deed has no legal effect.
Revocation is straightforward. The owner can revoke the deed at any time by recording a revocation before their death. If the owner records more than one beneficiary deed for the same property, the last one recorded controls.
A beneficiary deed that is executed, acknowledged and recorded in accordance with this section is not revoked by the provisions of a will.
A.R.S. § 33-405(J)This is a detail that catches many families off guard. A will cannot override a recorded beneficiary deed. If the deed names one person and the will names another, the deed wins. For couples who own property as joint tenants or community property with right of survivorship, all surviving owners must have signed the deed for it to take effect on the last owner's death.