As part of your estate planning, it may be necessary to transfer property deeds to a member of your family.
This may be as a “gift”. Alternatively, a property may be transferred according to the wishes stated in a will – or sold. In each case, the deeds must be transferred to another name.
When you transfer property to a new owner it is called “conveyancing”. Sometimes, this can be a challenging process for individuals. It is made easier with the assistance of an experienced estate planning lawyer.
There are also tax implications to bear in mind before committing to transferring property, so it’s best to consider all your options first.
At The Estate Planning Law Firm, our attorneys can help you decide on the best strategy and then help you prepare transfer property deeds easily and affordably.
What is a deed?
“Deed” is the term for a legal document that transfers ownership of the real estate in the U.S. It is required when transferring property as a gift or inheritance, or when selling a property to another owner.
This document generally contains the following information:
The identities of the buyer (grantee) and the seller (grantor) or the donor and the recipient
The purchase price of the property (if applicable)
A legal description of the property
The signature of the person transferring the property, which may be notarized
What are the different types of deeds?
In real estate transactions, there are generally two types of deed that apply:
1. Warranty deeds (“grant deeds”)
A warranty deed or “grant deed” is the most popular way to transfer real property.
This ensures ownership transfer and promises the new owner that the seller holds good title to the property. It says “I own the property I am giving you and the title to it is good.”
2. Quitclaim deeds
With a quitclaim deed, you can transfer any ownership interest you have in the real estate property without guaranteeing that the interest in the title is good.
This type of deed effectively says “I’m giving you whatever interest I have in this property, but I’m not guaranteeing that someone else doesn’t own the property.”
What are the tax implications of a property transfer?
There are tax implications for both the donor and recipient when transferring property, even as a gift or after death.
The IRS implements a gift tax that you, the donor, are liable for if you want to gift any property to another party above the value of $15,000.
It is best to check the exact tax implications with your accountant. Our estate planning lawyers may be able to provide some general guidelines for you on this. Also, bear in mind that the recipient of a property transfer may be liable for capital gains tax if they then sell the property.
Usually, capital gains tax is applied when a seller makes a gain on the buying price of the property. If a property is transferred after an inheritance or a gift is made, the new owner has not paid anything for the property – so the capital gains tax situation is more complicated.
In the case of a gift, you would need to find out what the cost of the property to the original owner was. With inheritance, the value of the property at the time of the donor’s death would be estimated.
Often, this is considerably less than the latest selling price, meaning a substantial capital gains bill. Long-term capital gains can be as high as 20 percent of the gain.
How can we help with deeds and property transfer?
Our lawyers can help with the conveyancing process, drawing up the proper legal documentation to organize the transfer of the property and to carry out your wishes accurately and legally.
We will help you:
Determine what form of the document is appropriate for the property transfer
Determine who must sign the documents to make them legal
Determine how the new owner will hold the title
Determine what interests in the property will be conveyed
Record the deed, mortgage, or another instrument with the county recorder’s office in the county where the property is located
The final step of recording the deeds in public records is essential for the new owner’s interests to be fully protected.
The two ways to transfer property to a family member are usually either as a gift or transfer on death. A gift may be revocable or irrevocable depending on when the property will be gifted – immediately or in the future.
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