What Is The Difference Between A Florida Quitclaim Deed And A Life Estate?
A mom of three adult children confronts them about who would act as personal representative when she dies. None of the adult children want the responsibility of winding up her estate when the time comes, so she makes the decision to draft a quitclaim deed to the eldest son, meaning he becomes the legal owner of the property while she remains in it. She did notify the mortgage company when making the property transfer, but he has recently become estranged from her and she is concerned. Is there any way she can reverse the quitclaim deed? What is a better option for estate planning?
What Exactly is a Quitclaim Deed?
A quitclaim deed transfers the title the property owner(grantor) has in real property to the grantee. It is an inexpensive and quick option, but often does not achieve what the parties are seeking. A quitclaim deed is often utilized when a property transfer is made from one family member to another (such as mother to son or sibling to sibling). The caveat with a quitclaim deed is that it comes with no assurances that title is free and clear from all encumbrances (such as another person’s ownership interest in the property, or a lien on fixtures in the house). Often divorcing couples will use a quitclaim deed to quickly make a property transfer from one spouse to the other. Unfortunately, execution of the quitclaim deed does not transfer any mortgage or liens on the property to the new owner. This means the grantor would still be on the hook for mortgage payments, and homeowner’s insurance even though they have no right, title or interest in the property because they conveyed it.
What are the Alternatives?
There are several alternatives to a quitclaim property transfer. One option is to execute a ladybird deed. A ladybird deed transfers the real property to the designated grantee upon the death of the grantor, while avoiding probate administration of the real property. The owner can also give themselves a life estate in real property with a life estate deed. Unlike a quitclaim deed, the life estate deed does transfer the mortgage and creditor claims with the property, but also gives the grantor a life estate to remain in the home until their death. The life tenant remains responsible for property taxes and expenses but is safe from ouster from the property by the new grantor.
Contact our Tampa Estate Planning Attorneys at Strategic Counsel Law Group
Assuming your immediate family will handle the responsibilities of estate administration dutifully and diligently often backfires. Unfortunately, some aging parents decide that handling estate planning matters now will avoid issues later. This is only true if estate planning decisions are made with the help and guidance of an experienced trusts and estates attorney. It is extremely rare that a quitclaim deed would be the right solution, and there may be tax implications for doing so. If you would need advice about estate planning strategies for your unique situation, contact our Tampa blended estate planning lawyers at Strategic Counsel Law Group today.