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The P’s & Q’s Of Quitclaim Deeds
Can you explain the good and bad of a “quitclaim” deed? I have successful, adult children. I am older, single, with a small mortgage on my home. Is a quitclaim best for my heirs and me, or not?
When it comes to real estate it’s important to know who owns what. With a quitclaim deed an individual gives up such rights as they may have to a given property.
You can see that such a definition includes some benefits and dangers. The person providing the quitclaim deed is giving up title to something, but what exactly is being given up? For instance, I can give you a quitclaim deed for the Golden Gate Bridge, transferring all of my ownership rights to you. Since I have no ownership rights the deed is worthless.
But quitclaim deeds have their uses and can provide a perfectly valid transfer of title. As an example, a party to a divorce might use a quitclaim deed to transfer title to a spouse. It is because quitclaim deeds can be valid that they should never be signed without first speaking with your own attorney.
With a sale situation buyers typically want a “general” warranty deed, a type of deed that says three things:
1. The title to the property is good and valid.
2. Except as disclosed, there are no encumbrances or liens.
3. There is a chain of title back to when the property was first described in the local land records.
Less strong are “special” warranty deeds. With these certificates an owner is saying he or she has good title but there may be outstanding liens or encumbrances. The seller does not say prior titles are valid, so it’s up to the buyer to check the title history.
In your situation you’re trying to transfer good, marketable and insurable title to your children, but what if relationships change? What if one of the children gets divorced or you remarry? What if you give up title and your kids want to sell the property – and you don’t? Such things happen.
Transferring title to your home is a very big step. For instance, what are the tax implications of a title change? What will be the impact on your estate?
Whenever transferring real estate ownership you want to make sure that it’s done right, reflects your best interests and is properly recorded. For details, speak with a local attorney who specializes in elder law and a tax professional before you sign any paperwork.
Peter G. Miller is the author of The Common-Sense Mortgage and a veteran real estate columnist. Have a question? Please write to firstname.lastname@example.org.View Foreclosure Article Archives
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