Not all deed transfers take place between strangers buying and selling property. Instead, many deed transfers take place between family members for a variety of reasons that include estate planning and divorce. This newsletter will discuss what a quit claim deed is; describe some of the situations in which it is used; and highlight some information that should be considered before executing a quit claim deed.
A real estate deed is a legal document that transfers title of real property and provides proof of ownership. There are several different types of deeds that are used to transfer ownership interests in property; however, a quit claim deed is often used to transfer ownership of property between family members. A quit claim deed does not provide the security measures that other deeds may have since it does not contain any guarantees or warranties that the conveyor owns or has authority to convey the property; it is simply the owner giving whatever interest he/she has in the property. This may not be a smart option for strangers buying and selling property from each other but it is a faster and less expensive option for family members that trust each other and want to keep a piece of property within the family.
Quit claim deeds are commonly used in property transfers between spouses, siblings and parents and children for estate planning purposes or purely to give a generous gift. Usually, in quit claim deed transactions among family members, there is little or no money involved in the transfer and the parties decide not to perform title searches or get title insurance. If you have a home or piece of property that you want to give to your children but want to continue to live in the home or occupy the property during your lifetime, you can execute a quit claim deed that reserves a life estate for yourself. A life estate will give you the legal right to possess the property until you pass away. This way you can remain in your home but have peace of mind that your property will ultimately go to your family.
Quit claim deeds are also used to transfer property between spouses going through a divorce. This situation arises when a couple owns property together but pursuant to the divorce, or other agreement, it is decided that one spouse will take the property. Executing a quitclaim deed will give one spouse the entire interest in the property but, if there is a mortgage on the property that is signed by both spouses, it will not relieve the other spouse from his/her financial obligations. So even if one spouse does not own the property, he/she is still obligated to make mortgage payments until it is paid off or a new loan is taken out that does not include him/her as a mortgagor.
Whether or not you should transfer property by quit claim deed depends on several factors including your property interest; your relationship with the parties involved; the type of property; and, if any, your financial obligations attached to the property. In addition to those factors, it is important to consult with your accountant regarding any transfer of assets because of the tax implications that could be involved. James G. Dibbini & Associates, P.C. has over 20 years of experience counseling and representing clients in deed transfers, real estate transactions and estate planning. Let us help you. We can work with you to determine the best legal strategy to use in transferring your property and then execute that plan by drafting and filing the required legal documents. Please contact our offices to learn more about quit claim deeds and other options available to you regarding the transfer of your property.
This James G. Dibbini & Associates, P.C. Blog post is a publication of James G. Dibbini & Associates, P.C. All Rights Reserved. Quotation with attribution is permitted. This blog post offers general information and should not be taken or used as legal advice for specific situations, which depend on the evaluation of precise factual circumstances. Please note that James G. Dibbini & Associates, P.C. does not undertake to update its publications after their publication date to reflect subsequent developments. Prior results do not guarantee a similar outcome. This publication may contain attorney advertising.
