Deed In Lieu of Life or Will is a legal document that designates the person, the parties involved in transferring the properties and other assets to an appointed individual. The property and assets transferred through this method do not pass on to any surviving spouse, children or any other beneficiaries. When a person dies, his/her estate is left with his/her personal representative. Deeds in Lieu of Life ensures that the person dies, not leaving assets to his/her personal representative but leaves it with a trustee who holds and manages the estate. This gives complete control over the assets to the trustee, who can use it in payment of debts or to liquidate it to meet creditors’ claims, if any.
Unlike probate, where there is a physical certificate, Deed in Lieu of Life ensures that no certificates are left behind, thus no last-minute paperwork or double taxation. Once the person dies, the person’s estate goes to the surviving spouse and children, who hold the power of appointment over it under the law. These powers are transferred according to the terms set by the document signed by both the living person and the deceased person. After the deceased person’s death, the remaining property and debts of the decedent are distributed among the beneficiaries according to the instructions mentioned in the document. These debts and properties are then paid off by the beneficiary or the inheritor.
Beneficiaries are required to appoint one or more administrators. Administrators are legally responsible for managing the deceased estates. The name of the administrator is mentioned in the document, which is witnessed by two witnesses named Testator and Administrator appointed by the testator. In some cases, only one administrator is required, while in others, two Administrators are permitted.
There are a few very important differences between probate and deceased estates. These differences are on the part of the beneficiaries. For instance, they cannot avail of the capital gains tax benefits, and they cannot enjoy the superannuation benefit till the time when the assets are disposed of. Another major difference is the transfer of property from the estate of the deceased person to the beneficiaries. While the probate of the property is transferred to the executors on behalf of the deceased person, in the case of the deceased intestate estate, it is transferred to the beneficiaries after the administration is completed.
The administration of probate and deceased estates is carried out by the court, which is headed by a judge. Usually, an attorney is the one who would represent the interests of the estate and the people involved. Another important person is the real estate agent, who is the representative of the people. Once the administration is over, the real estate agent is no longer required to handle the assets.