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There's No Such Thing as a Quick Deed

Mon, Feb 15, 2016 at 3:45PM

People often hear from friends and relatives that they should sign a "quick deed" or a "quick claim deed." There is no such thing. There is a type of deed called a "quit claim deed." It is not favored because it does not indicate that the grantor owned the property. It is not advisable to sign any type of deed without legal advice.

Often people sign deeds to avoid probate. There may be more disadvantages than advantages in doing so. Probate is a reasonable procedure for handling many estates.

Several issues should be considered before conveying an interest in property to anybody.

If there is any chance the owner might need nursing home care within the next five years, adding a name to the title may disqualify the owner. Although one's home is an exempt asset, transferring an interest negates the exemption.

The tax basis of the property may be an issue. If one gives away an interest in property value while alive, the grantee receives the grantor's tax basis. On the other hand, if property passes at death, the tax basis is stepped up to date of death value.

Adding a name to title is irrevocable. To remove the name, or to sell or mortgage the property, the signature of the person grantee is required.

A creditor of the grantee could attach the property. The homestead only applies to the person claiming homestead.

If the person whose name has been added to title dies, title may pass to a person other than the original owner.

If there is a mortgage on the property, the Department of Revenue requires that documentary stamps be paid. If they are not paid, the state may charge penalties and interest.

These are some reasons we discourage adding a name to title. It is often better to handle the transfer of the home through the probate process. There are types of deeds and other choices that do not have the problems, stated above, but no choice is foolproof.

There's No Such Thing as a Quick Deed

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