{"id":3680,"date":"2024-01-17T09:53:31","date_gmt":"2024-01-17T14:53:31","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=3680"},"modified":"2024-04-26T00:17:52","modified_gmt":"2024-04-26T04:17:52","slug":"you-can-quitclaim-your-home-to-a-loved-one-to-skip-probate-costs-is-it-worth-it","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/you-can-quitclaim-your-home-to-a-loved-one-to-skip-probate-costs-is-it-worth-it\/","title":{"rendered":"You Can Quitclaim Your Home to a Loved One to Skip Probate Costs. Is It Worth It?"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

A quitclaim deed<\/a> easily, quickly transfers your home\u2019s title. You can use a quitclaim to give a home to someone else, with no expectation of a payment from the recipient. Some people use quitclaims to pass homes to their family members.<\/p>\n\n\n\n

So, is this a good way to carry out your wishes yourself \u2014 a sort of early estate planning? Who needs their home going under a probate court\u2019s supervision after they die, right? And who wants to pay huge fees to the county for the trouble?<\/p>\n\n\n\n

Fair questions. But\u2026  <\/p>\n\n\n\n\n\n\n\n

First, How Pricey Is Probate? Maybe It\u2019s Worth the Price?<\/h2>\n\n\n\n

Probate cases cost money. They can easily suck up 4% or 5% of all the value you had. First there\u2019s a filing fee: a few hundred dollars. Appraisals of personal items can cost several thousand dollars. There are the executor fees. And the accounting fees.<\/p>\n\n\n\n

Probate also takes time. The distribution of value to creditors and heirs can easily span a year and a half.<\/p>\n\n\n\n

But probate is a valuable process. Under court supervision, your debts and liens will be resolved. Your home will be conveyed with the probate court\u2019s official deed when the process wraps up.<\/p>\n\n\n\n

And there\u2019s a silver lining in probate. It\u2019s the stepped-up cost basis for your home. That\u2019s a big deal. It allows your chosen recipient a tax-advantaged way to sell the home once the probate timeline allows for that. If you bequeath the home through your will, your designated new owner can sell the property<\/a> and receive its value without having to pay capital gains tax on all the appreciation in your home ever since you first acquired it.<\/p>\n\n\n\n

Early Transfer to Your Heir, Using a Quitclaim? Be Sure This Is What You Want to Do.<\/h2>\n\n\n\n

To keep away from probate, you could certainly transfer your home at any time to anyone you like, using a quitclaim. A quitclaim needs no title search. Therefore it makes no promises about the state of the title. It simply transfers the interest described on the deed to the recipient. The giver is the grantor<\/em>, and the recipient is the grantee.<\/em><\/p>\n\n\n\n

So, as a homeowner, you\u2019re always free to fill out a quitclaim deed, naming yourself as the grantor and the person you choose as the grantee. Use your current deed\u2019s exact legal description. You would make sure the recipient accepts your gift, then have the deed notarized and recorded in your county. This puts the new owner\u2019s name in the county records. Done.<\/p>\n\n\n\n

Deeds.com offers <\/strong><\/em>quitclaim deed forms<\/em><\/strong><\/a> for any state and county. Our forms meet the legal rules to properly transfer your home.<\/strong><\/em><\/pre>\n\n\n\n
But understand your tax situation first. Unless you\u2019re giving your interest to your spouse, the IRS counts your home\u2019s value against your lifetime gift tax exemption<\/a>. Check your state\u2019s gift and transfer tax rules, too.<\/p>\n\n\n\n
Most important, though, is the loss of the stepped-up cost basis for your home, as we\u2019ve described in the section above. This is a key reason people do not <\/em>use quitclaiming as an estate planning shortcut.<\/p>\n\n\n\n
Giving Your Loved One a \u201cPocket\u201d Quitclaim? Here\u2019s What Happens.<\/h2>\n\n\n\n
A quitclaim deed transfers an interest in real property to another person \u2014 very often, between people who are related. Sometimes, a quitclaim is just given to a loved one to keep \u201cin case something happens to me.\u201d The recipient stuffs the paper away in a drawer without recording it. Sometimes, that\u2019s the end of the matter, as the deed gets forgotten.<\/p>\n\n\n\n
Fast-forward to the homeowner\u2019s death. The intended property transfer was never recorded, so the probate court will deal with transferring the home out of the estate.<\/p>\n\n\n\n
Others might question any \u201cpocket\u201d quitclaim deed that appears at this point. They might not believe that the late owner really meant to give the home away. After all, that intent was never formalized through the county records. Now, there\u2019s a title dispute. The crisis could have been averted, with proper recording.<\/p>\n\n\n\n
Does this mean unrecorded deeds are never good? No. Some states accept unrecorded deed transfers as valid. But some states void<\/a> them, to prevent tangled titles later on. Not surprisingly, homes with unrecorded deeds sometimes end up being transferred to multiple people. <\/p>\n\n\n\n
All things considered, it\u2019s best to avoid pocket deeds of any kind. Giving or getting real estate? Make sure the deed gets recorded! <\/p>\n\n\n\n
You Could Always Quitclaim the Title Into a Trust\u2026<\/h2>\n\n\n\n
\"\"<\/figure>\n\n\n\n
A living trust<\/a> is an excellent method for passing a home\u2019s title along. This kind of trust is revocable throughout your life, just in case you change your mind or you run into a situation where you need your home equity. A trust has the benefit of flexibility.<\/p>\n\n\n\n
A visit to an estates and trusts lawyer can ensure your trust document adheres to state law. And then it\u2019s done. After your death, your loved one receives the deed to your home without the need for probate.<\/p>\n\n\n\n
You\u2019ll recall how a last will gives the beneficiary a stepped-up cost basis for the home. Transferring the house through a revocable living trust gives your recipient the same tax advantage.<\/p>\n\n\n\n
You can create a trust that allows for refinancing in the future if you wish.<\/p>\n\n\n\n
To quitclaim a home into the trust:<\/strong><\/h3>\n\n\n\n
    \n
  1. Sign the deed over to the name of your trust, naming the trustee and successor.<\/li>\n<\/ol>\n\n\n\n