Nonprobate Transfers in Missouri
Not all property owned by a decedent at death is subject to Missouri’s probate laws. The Nonprobate Transfers Law of Missouri liberally grants individuals the ability to transfer property from one generation to the next without the interference of the probate court. The key question is: when is a transfer classified as a nonprobate transfer under Missouri law?
RSMo 461.005(7) defines a nonprobate transfer as a transfer of property taking effect upon the death of the owner, pursuant to a beneficiary designation. What, though, is a beneficiary designation? The statute goes on to state that a beneficiary designation is a provision in writing that is not a will that designates the beneficiary of a nonprobate transfer, including the transferee in an instrument that makes the transfer effective on death of the owner, and that complies with the conditions of any governing instrument, the rules of any transferring entity and applicable law.
What makes this definition problematic is that it includes “other applicable law” (e.g., the nontestamentary transfers laws in Missouri), “governing instrument law (e.g., contract law), and transferring entity rules (e.g., financial regulation or security rules, etc.). Plain compliance with the text of the statute, then, requires compliance with other areas of law.
Consequently, to ensure that both the statute and other applicable laws are followed, careful action needs to be taken to properly create a nonprobate transfer in Missouri. Failure to follow these other areas of law could result in the property being subject to a probate proceeding.