Defined in its most elementary form, a quitclaim deed is a document a home owner uses to pass along legal and financial ownership of their home to another individual. Quitclaim deeds can also be used as a means to remove a homeowner from the title to that home.
Sometimes - though incorrectly - called "quick claim deeds" or "quit claim deeds", quitclaim deeds possess several key uses, including:
- Having a former spouse removed from title after a divorce
- Adding a new marriage partner to a title
- Assigning a home to a trust or entity
Here is an example:
Say you quitclaim your interest to the Brooklyn Bridge to your best friend. It is highly unlikely that the quitclaim deed you write will be worth anything, seeing as how it is likely that you likely do not own the Brooklyn Bridge.
This is where quitclaim deeds are different from warranty deeds (otherwise known as grant deeds), which represent the types of transfers that take place when real estate is sold.
As always,prior to issuing a quitclaim deed on your own home, consult an estate planning or real estate attorney. Transferring real property can wreak havoc on a will. It can also trigger taxes. As such, you may also want to ask your accountant to take a look at the transaction.
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