estate planning

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grandparents homeThe short answer to this question is no. Naming your child as the recipient of your home in your will does not give them any right to your home while you are still living. However, understanding why requires a little more explanation.

Title Is Key

When it comes to real property such as a house, the person who has title to (or legal ownership of) the property controls the property. The title holder (owner) can lease, mortgage, refinance, sell, gift, or do anything else with the property. When you purchased your home, you received title to it through a deed. This deed proves you are the owner and you have all rights to your property.

A Will Is Effective Only upon Your Death

Continue Reading If I Give My Home to My Child in My Will, Can They Take My Home While I Am Still Alive?

When using trusts in estate planning, a key element includes transferring the trustmaker’s real estate into the trust by recording a deed with the local recording authority. 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.

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. Probate is a state court process that often involves significant expenditures of time and money and causes complications that many people would rather avoid.

However, an important question arises regarding the type of deed that should be used for transferring real property into the trust’s name. There are several types of deeds that can be used, one of which is a general warranty deed. The other types of deeds commonly used in the United States for transferring property are quitclaim deeds and special warranty deeds.

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 ownership of real property.

Quitclaim Deeds

When someone (grantor) wants to transfer whatever property rights they have in a parcel of property, they can use a quitclaim deed. 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 grantee.

real estateWhat makes quitclaim deeds unique, however, is that the grantor who creates and signs the quitclaim deed is also putting the grantee on notice that they make no promises whatsoever that they actually own the property. If they do own the property, it is effectively transferred using the quitclaim deed after it has been recorded with the local recording authority. But if it turns out that the grantor did not, in fact, own the property, the grantee cannot bring a claim against the grantor unless they can prove that the grantor knowingly intended to defraud the grantee. However, if the grantor thought they owned the property but in fact did not own it because of some problem with the title, the grantee would have no ability to make the grantor legally liable for the error.

However, it is still common for individuals to use quitclaim deeds when transferring real property into a family trust for estate planning purposes. 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. 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.

General Warranty Deeds

Continue Reading Using Real Estate Deeds in Estate Planning

The mortgage business is booming in many parts of the country. Historically low interest rates have created an almost frenzied environment with homeowners scrambling to refinance their home loans at these low interest rates. Even a few tenths of a percentage point of interest, over thirty years, can make a massive difference in the amount of interest that is ultimately paid on a loan.

For many, it makes perfect sense to take advantage of these interest rates. Besides the associated transaction fees of refinancing, there is frequently little to no downside to refinancing in times like these. However, one often overlooked consideration is the impact that refinancing your home could have on your estate plan.

When You Own Your Property In Your Name

Whether you own your real estate solely in your name or jointly with a spouse or other family member, refinancing your property has little impact on determining who will receive your interest in the property upon your death.Continue Reading How Refinancing a Property Can Affect Your Estate Plan

As a real estate attorney, one request I often receive from clients is to prepare a deed to transfer their real estate into either a trust (such a revocable trust for estate planning purposes) or an LLC (for liability purposes). At first glance, this may appear to be a simple request with no adverse effects or consequences. However, depending on when the property was acquired, transferring your property may have adverse effects on your owner’s title policy that you received when you purchased the property.

Florida Title Insurance Policy Forms

The Florida Office of Insurance Regulation (“Florida OIR”) governs the title insurance industry in several ways, including the rates charged and the title insurance policy forms issued by attorneys and title agents to purchasers of real estate.Continue Reading Potential Title Insurance Pitfalls When Transferring Property into a Trust or LLC