Can Property Held in a Trust be Transferred by a Beneficiary Deed in Arizona?
The Arizona Court of Appeals recently considered for the first time in Arizona whether Arizona trust property may be conveyed by a beneficiary deed. The court answered, no in the matter of In Re Augusta Ganoni, No. 1 CA-CV 14-0240 (App. 2015), Ganoni executed a beneficiary deed to transfer her home to her attorney upon her death. The home was, at the time of execution of the deed, property of Ganoni’s Arizona Revocable Trust.
Ganoni was both settlor and trustee of the Trust. Ganoni signed the beneficiary deed in her capacity as trustee and directed that
the home transfer to her attorney upon her death. Subsequently, Ganoni changed her Trust, including the provision granting her attorney her home. Upon Ganoni’s death, a formal probate was filed and Ganoni’s attorney sought her home. The trial court refused him, concluding that the home was a trust asset and could not be conveyed using a beneficiary deed, under A.R.S. § 33-405.
Arizona Trust v Beneficiary Deed | The Court of Appeals’ Ruling
The Court of Appeals looked to A.R.S. §33-405 to determine whether the “owner” who executes a beneficiary deed under the statute must be a natural person. It concluded that the language in A.R.S. § 33-405 “clearly indicates that only a natural person may execute a beneficiary deed.” The court refused to expand A.R.S. § 33-405 to include trustees and trust property noting that the statute clearly directs that a beneficiary deed controls over conflicting provisions in a will.
Contact our experienced Arizona Estate Planning Attorneys at (480)947-4339.