Transferring Property Between Family Members: A Step-By-Step Guide
When estate planning with older family members, you will likely learn a lot about probate and the steps for asset distribution among family members. Something you may discover is that many people choose to transfer property into another family member’s name before their death. But why is this done? And more importantly, how is this done?
This article will look at the need for transferring property between family members, what a quitclaim deed is, how to get a quitclaim deed, and what steps you need to take to transfer property between family members. Read on now to learn more.
The Need to Transfer Property Between Family Members
It may seem an alien concept to you to transfer property to a family member before a person’s death, but there are quite a number of reasons people do this while estate planning and at other times in their lives. Below are some of the most common reasons that people transfer property between family members.- Estate planning: We have already mentioned this reason, but estate planning is one of the most popular reasons for transferring property. By transferring the property into a family member's name before your death, you help relatives avoid probate, which is a lengthy process in itself. It simplifies the overall distribution of assets after your death and makes things easier for those you leave behind.
- Gifting: Some people may choose to transfer property to a family member as a way of gifting them the financial benefits of property ownership. This can be done at any point in someone’s life.
- Division of assets: During divorce or separation, the two parties will need to divide their asset, and, as such, transfer of property may occur depending on the family dynamic and current ownership.
- Tax planning: Some people choose to transfer property ownership to reduce tax liabilities, particularly in the case that the property has appreciated significantly, leading to much higher taxes for the owner.
- Financial assistance: Transferring property to another family member could support them financially while helping them buy their own house or get their finances back on track.
- Avoiding foreclosure: In cases where a bank may have to foreclose a home, the owner can transfer the ownership to another person so that they take on mortgage and financial responsibilities, helping them avoid losing the house altogether.
Quitclaim Deeds: What Are They and When Are They Used?
A quitclaim deed is a legal document used to transfer or amend a title on real estate property. They are sometimes called non-warranty deeds because they offer no guarantees that the current owner possesses the full rights to the property when it is transferred to its new owner.A quitclaim deed occurs between the current owner, known as the grantor, and the new owner, who is known as the grantee.
This type of deed transfers any rights or interest that the grantor has to the grantees, so it may not be full ownership but part ownership instead. Unlike a warranty deed, a quitclaim deed does not include any assurances of undisclosed liens against the property and instead just transfers the grantor's interest without any guarantee of validity.
It is a quick and simple solution that helps people avoid lots of paperwork. However, it is not suitable in all situations. For the most part, quitclaims are used when transferring property between family members, transferring a property to a trust, or as part of divorce settlements.
As a quitclaim deed doesn’t offer as many protections as a warranty deed, it is best not to accept one from someone you don’t know well. Make sure you know and trust anyone who offers to use a quitclaim deed to transfer property into your ownership.
Steps to Transferring Property Between Family Members
Below are the steps you would need to take if you were to transfer ownership of a property to a family member using a quitclaim deed.1. Preparing the quitclaim deed: You can obtain a quitclaim deed form online that meets your specific state requirements, but if you have any questions or wish to seek professional help, a lawyer can also help to draw up a quitclaim form.
2. Fill out the quitclaim deed: Input all the data required, including a legal description of the property and the names of the grantor and grantee of the property.
3. Notarize the quitclaim deed: A notary must sign the document for it to be considered valid, so be sure not to skip this step.
4. File the deed: A county recorder's office is the most likely place that you will file a quitclaim deed. You will need to locate the office in the county where your property is located. You may have to pay a filing fee.
While you can fill out and complete a quitclaim on your own, you may consider seeking legal services to ensure that everything gets filed properly.
Final Thoughts
A quitclaim deed offers a simple and easy way for the transfer of property between family members. Transferring property to a family member may be done in a range of cases, including estate planning, divorce, and gifting purposes. A quitclaim offers fewer protections than a warranty deed and should only be used in situations where you know and trust the grantor.Do You Need An Attorney?
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Posted - 12/20/2023
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