Real estate is often one of the most valuable forms of property included in estate planning documents, including a last will and testament or living trust. One of the simplest ways to transfer ownership of property into a trust or someone else’s name is to use a quitclaim deed. However, there are potential risks you should be aware of before completing a property transfer with a quitclaim deed.
Quitclaim Deed Definition
A quitclaim deed is a legal document in which a grantor conveys their present ownership interest in a property to a grantee. The grantor does not make any guarantees about the property, including any regarding their ownership of the property. However, whatever ownership interest the grantor has, the quitclaim deed transfers to a new owner.
Definitions of Other Important Terms Involved in Quitclaim Deed Transactions
| Term | Definition |
| Grantor | The current owner of the property |
| Grantee | The new owner of the property |
| Encumbrance | A claim against the property by someone other than the property owner, often, but not always, a lien |
| Title company | A company that conducts a title search to determine if there are any encumbrances or other clouds on the property title. |
| Title insurance | A special type of indemnity insurance that protects buyers and mortgage lenders from financial losses or other damages caused by a title defect, such as outstanding liens, conflicting wills, or owed taxes |
| Lien | A security interest in a property by a creditor |
Other Names for Quitclaim Deeds
Quitclaim deeds may go by different names in different areas. Additionally, the phonetic pronunciation of this term has resulted in several variations of this term, including:
- Quit claim deed
- Quickclaim deed
- Quick claim deed
It should be underscored that the correct spelling is: quitclaim deed.
The Fundamentals of Quitclaim Deeds
A quitclaim deed transfers the grantor’s property interest to a grantee of their choice. Like with any other property deed, the deed must be recorded with the county recorder to have any legal effect. Depending on the jurisdiction, the grantor may be responsible for paying for the transfer tax.
However, there are limitations to what a quitclaim does and does not do.
What a Quitclaim Deed Does
A quitclaim deed helps a homeowner complete a property transfer in a quick and affordable manner. Because of their simplicity, quitclaim deeds are often used to transfer property between family members.
What a Quitclaim Doesn’t Do
quitclaim does not:
- Guarantee that a property has no liens against it or any other title issues
- Guarantee that the grantor will resolve any issues that arise with the property title
- Guarantee that the grantor holds full ownership of the property
In fact, a quitclaim deed does not even say the grantor has any legal right to sell or convey the property. Therefore, a quitclaim deed could be worth less than the paper it’s written on.
What Must Be Included in a Quitclaim Deed
You can find examples of quitclaim deeds online, such as this blank Florida quitclaim deed form. This can give you a better idea about the requirements of a quitclaim deed. The requirements may vary by jurisdiction, but, generally, a quitclaim deed must contain the following information:
- A legal description of the property (not just the street address)
- The name of the grantor and grantee
- A statement regarding the ownership interest the grantor is conveying in the property
- The signature and stamp of a notary public
- The date the document was signed
Potential Uses of Quitclaim Deeds in Estate Planning
Quitclaim deeds offer an inexpensive way to transfer property, so they are often used in estate planning. Here are some of the common uses of quitclaim deeds in estate planning:
- Avoid Probate
Real property is often the most valuable asset a person owns. If they transfer their ownership interest of the property to someone else before their death, their estate may not have to go through the probate process, which could potentially save loved ones time and money. That said, although people may choose to avoid probate in this manner, there are much more efficient strategies, such as through the use of a revocable living trust.
- Transfer Property Between Family Members
If you already know you want your only child to receive your property, you might prefer to execute a simple quitclaim deed, rather than going through a potentially more expensive process to hire a real estate attorney to draft a warranty deed for you.
- Have an Ex-Spouse Sign Over Their Interest in Property
If you were previously married and co-owned property with your ex-spouse, you might need to have the ex sign over their ownership interest so that you can refinance the house in your own name. This requirement may be included in your divorce decree, prenuptial agreement, or postnuptial agreement.
- Sign Over Interest in a Property to the Co-Owner
You may want to sign over your property interest to the co-owner in certain situations. For example, Medicaid’s community spouse resource allowance may allow your spouse to maintain some property and other assets if they continue living in the property while you are in a nursing home.
- Transfer Real Property to a Living Trust
You may also use a quitclaim deed to transfer real property to a living trust. Once this transfer is made, the trust becomes the owner of the property.
Potential Risks of Quitclaim Deeds
While quitclaim deeds can potentially help with a variety of real estate transactions, they can pose several risks, including:
- Title problems – When a property owner signs away their interest in a property through a quitclaim deed, they are not guaranteeing that there is a clear title. A title company may conduct a title search and find that there are liens or other encumbrances against the property, which may greatly devalue the property and potentially put the new owner on the hook for resolving these issues.
- Refinancing problems – Because a title search can come back showing issues, a lender might not be willing to refinance a property that has been conveyed through a quitclaim deed.
- Potential for legal claims – The grantor also makes no guarantee that the property transfer is legal or valid. Therefore, a new owner acting on a belief that the property is theirs may take action that negatively affects someone else’s ownership claim and can make them vulnerable to legal claims against them.
- Recording problems – It may be possible that the quitclaim deed was never recorded with the county clerk or that there are multiple quitclaim deeds for the same property, which can further confuse the situation and make it difficult to determine who the rightful property owner is.
People who are worried about the potential issues that quitclaim deeds may create may wish to work with a real estate attorney or estate planning law firm that can suggest alternatives to quitclaim deeds or use other resources to trace public records to ensure the title is free and clear. A lawyer can provide personalized legal advice for your situation. PassDown provides a convenient directory of local estate planning lawyers that you can reach out to for help.
Other Types of Deeds
A quitclaim deed is only one type of deed. There are many other types of deeds. Here is a chart that shows common types of deeds and their similarities and differences.
| Type of Deed | Characteristics |
| General Warranty Deed | Guarantees: A property has no liens against it Seller holds full ownership of the property The seller has the legal right to sell the property The seller will pay costs to defend the title |
| Special Warranty Deed | Guarantees the seller has a legal right to sell the property, does not owe a mortgage, does not have any encumbrances on the property, and has not sold the property during their ownership of the property but does not guarantee there are no title problems that arose prior to their ownership of the property |
| Quitclaim Deed | Transfers the ownership interest the grantor has in the property, with the understanding they may not have any interest at all |
| Other Deeds | There are many other types of deeds that may have special purposes or requirements. See our grantor vs. grantee article for more details. |
Takeaway
Homeowners who want a quick and simple way to transfer property can use a quitclaim deed. However, there are risks, so it is important to carefully weigh the risks and benefits before executing any property deed.