Deeds

Deeds

Deeds can provide great flexibility not only in expanding or narrowing ownership interest in real estate, but also in estate planning.  Knowing the different types of deeds and ownership interests and having the right type are critical in protecting one’s interests and accomplishing one’s goals.

When an individual acquires a property, he or she receives either a general warranty deed or a quit claim deed.  With a general warranty deed, the grantor guarantees that the title is free from any liens or encumbrances.  With a quit claim deed, no such guarantee is provided.  The grantor merely conveys whatever title he or she has to the grantee.  When one is gifted property, one often receives a quit claim deed.  When purchasing property, one should always demand a general warranty deed.  When receiving property from a guardianship or an estate, one receives a fiduciary deed since the executor or guardian is only acting as a fiduciary for the estate or guardianship.

When multiple individuals own property, they own the property as tenants in common or as joint tenants with rights of survivorship.  It is important to know what type of deed you have if you are a joint owner.  Tenants in common can convey their interest upon death to whomever they want.  With joint tenants with rights of survivorship, when one owner dies, his or her interest automatically vests to the surviving co-owner or co-owners.  Most spouses would prefer to own property as joint tenants with rights of survivorship so that upon the death of the first spouse, his or her interest passes directly, outside of the probate process, to the surviving spouse.  In such instances, they should make sure that they have a survivorship deed with the appropriate language in the deed.

Individuals can also carve out specific ownership rights in a deed.  A life estate may be granted in which the deed grants one person the right to live in the property for life or as long as it is the person’s primary residence with the property then passing to another individual or individuals.

Another fairly recent estate planning tool is the use of transfer on death beneficiary designations.  A transfer on death beneficiary designation affidavit can be recorded at the recorder’s office.  Such an affidavit does not affect ownership but designates the designee to receive the property, by law, immediately upon the death of the owner.  Such a tool may be an effective and more inexpensive alternative to a trust when attempting to bypass the probate process.

Deeds can be very flexible and effective tools in carrying out one’s wishes with respect to both current and future ownership interest in real estate.  Knowing what type of deed you have or creating the appropriate deed for you is critical in having a proper estate plan and in protecting your interests.

If you have real estate, deed, or estate planning questions, don’t hesitate to contact Holzfaster, Cecil, McKnight & Mues at (937) 293-2141 to schedule an appointment.  Or, if you would prefer, you can use our form below to contact us online.  In addition, we have an emergency phone number, (937) 760-4357, which we answer around-the-clock.