1/21/2024 0 Comments Real estate conveyance trustWithout such warranties by the transferor, the real estate transaction is much riskier for the transferee. By signing the warranty deed, the transferor is promising that they will be liable to the transferee for any costs associated with such mistakes.Īs you might imagine, most transferees in an arms-length purchase will require that the deed transferring the property to them be a general warranty deed. The transferor can use this type of deed to assure the transferee that the property is free from any encumbrances such as a mortgage or lien and that the title is free from any defects. Then, when the time comes to sell the property, the purchaser will, presumably, buy title insurance to cover any past defects in the title when they take the property.Īnother frequently used option is a general warranty deed. They (or their attorneys) reason that a quitclaim deed transfers any ownership interest that you may have in the property to your trust so that your trust can hold and manage it if you become incapacitated or die. However, it is still common for individuals to use quitclaim deeds when transferring real property into a family trust for estate planning purposes. However, if the transferor thought they owned the property but in fact did not own it because of some problem with the title, the transferee would have no ability to make the transferor legally liable for the error. But if it turns out that the transferor did not, in fact, own the property, the transferee cannot bring a claim against the transferor unless they can prove that the transferor knowingly intended to defraud the transferee. If they do own the property, it is effectively transferred using the quitclaim deed after it has been recorded with the local recording authority. What makes quitclaim deeds unique, however, is that the transferor who creates and signs the quitclaim deed is also putting the transferee on notice that they make no promises whatsoever that they actually own the property. When an individual drafts and signs a quitclaim deed, they are, in effect, making a statement that whatever they own regarding the property described in the deed is now transferred to the transferee. When someone wants to transfer whatever property rights they have in a parcel of property, they can use a quitclaim deed. Although a full discussion of the differences among the types of deeds is not possible in an article of this length, the following information briefly explains each type of deed and why someone might want to use it when transferring real estate ownership.ģ Types of Deeds Used for Transferring Real Estate The other types of deeds commonly used in the United States for transferring property are quitclaim deeds and special warranty deeds. There are several types of deeds that can be used, one of which is a general warranty deed. However, an important question arises regarding the type of deed that should be used for transferring real estate into the trust’s name. Probate is a state court process that often involves significant expenditures of time and money and causes complications that many people would rather avoid. If the trustmaker were to die without retitling the property in the trust’s name, the property may have to pass through the probate process even if the trustmaker had a will. This step is crucial for ensuring that the trustee has the authority to manage and ultimately sell or transfer the property should the trustmaker become incapacitated or die. When using trusts in estate planning, a key element includes transferring real estate belonging to the trustmaker into the trust by recording a deed with the local recording authority. What Type of Deed Should I Use When Transferring Real Estate into a Trust?
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