Legal Question in Real Estate Law in Arizona

It does not affect the transfer of the house. The beneficiary deed does not take effect until the owners have passed away. If, at that time, your daughters owe money to the IRS, the government could put a lien on their interests in the house and grab their share of the proceeds upon the sale of the house. There are many events that could occur between now and the time that you pass away, so the transfer may never take effect, including you making a new beneficiary deed naming other beneficiaries than the 2 daughters in debt..