Transferring Assets: Quit Claim Deed Living Trust
If you have real estate property that you intend to bequeath to your loved ones, there are two popular ways you can do it. You can legally include it as part of your will or you can add it under a living trust. Two ways you can transfer your real estate assets to another party immediately is by using a warranty deed or a quitclaim deed. This article will discuss the intricacies of both and how to incorporate a quitclaim deed into your living trust.
Quitclaim Deed vs Warranty Deed
A quitclaim deed is a document used to transfer interest of ownership of an asset, mostly to a loved one, without any guarantee or obligations. When preparing estate planning documents like a will or a living trust, you would typically need a deed to legally incorporate your real estate assets into your trust or will. Transfers are regarded much more like a gift than a legal sale in a quitclaim deed.
A warranty deed, on the other hand, is suitable for the formal sale of real estate assets and is usually issued by the seller. It stipulates the rights and privileges bestowed on the buyer of the property and outlines that the owner is free from all issues that may arise from the transfer.
The major differences between a quitclaim deed and a warranty deed are:
|Quitclaim deed||Warranty deed|
|Quitclaim relies on mutual unwritten trust between both parties.||The warranty deed demands that the seller provides a written guarantee to the seller.|
|The beneficiary of a quitclaim deed cannot sue the issuer, in the event of encumbrances or fraud.||The buyer or beneficiary of a warranty deed can sue the seller or giver in the event of encumbrances.|
|A quitclaim deed is a faster means of transferring assets.||Warranty deeds are typically more tedious to complete as they require a lot of regulatory paperwork.|
|A quitclaim deed is suitable for the transfer of assets between or among friends and family members.||A warranty deed is suitable for the transfer of assets to non-relatives, formal business entities, or corporate bodies.|
|The assets in quitclaim deeds are usually considered non-taxable in most states.||A warranty deed may require tax filings, especially if profit has been made by the seller of the property.|
Reasons to Get a Quitclaim Deed
With all that’s been said, you should get a quitclaim deed if you:
- Are in the process of setting up your living trust
- Are considering transferring your assets to a joint revocable trust
- Are looking to gift an asset to a loved one
- Have agreed to change the ownership of a property to a family member
Setting Up a Quitclaim Deed
Setting up your quitclaim deed is pretty simple. You do not need to involve a lawyer depending on your knowledge of the laws of the state on the transfer of ownership. The steps typically involve:
|Determine the worth of the asset||You can do this with the aid of an estate valuer, a lawyer, or simply, based on a mutual agreement between both parties - the grantor and the grantee.|
|Gather all relevant details for the deed||The relevant details include:
|Draft a quitclaim deed||You can find generic templates online, draft one yourself, or use DoNotPay to help you draft one.|
|Sign and notarize your quitclaim deed||The deed is brought into action the moment both parties sign and notarize the document.|
|File your quitclaim deed||After signing the deed, the final step is to file the document with the local county clerk for a fee.|
Quitclaim Deed and Living Trusts
Given its fast and simple setup process, a quitclaim deed is suitable to transfer assets to your living trust. A living trust is a document you can create to transfer your assets to your loved ones while you are still alive. It is much different from a will, as it helps you avoid the costly and cumbersome process of probate. A revocable trust and an irrevocable trust are two types of living trusts but they differ in the sense that revocable trust is flexible and gives room for changes while irrevocable trusts stay permanent.
Living Trusts by State
Before you set up your living trust, you need to know what specific laws your state has set aside for living trusts. Read our guides by state:
Create a Revocable Living Trust With DoNotPay
- Log-in to your DoNotPay account and go to the Revocable Living Trust product
- Choose your beneficiaries
- Assign your trustees
- Enter the assets and properties that will go under the trust
- Set instructions on what will happen to assets not listed in the trust
A Robot Lawyer and Assistant in One!
Here’s a list of legal-related matters DoNotPay assists with:
- Appeal parking tickets
- Create a non-compete agreement
- Draft a confidentiality agreement
- Get copyright protection
- And more!
Here’s a list of service-related things DoNotPay can help you with:
- Send mail
- Talk to any customer service representative on your behalf
- Look for sex offenders near you
- Warranty claims
- Airline compensations