What is the purpose of a quitclaim deed? It's easy to get confused given the number of deeds available for the transfer of property. A quitclaim deed is a legal document by which you can transfer the interest you hold in a piece of property to someone else. A quitclaim deed must be signed by the property owner, the grantor, and adequately describe the property being transferred.
The purpose of a quitclaim deed is to provide a quick, efficient means by which to transfer property from one individual to another. Because the grantor makes no warranties as to his ownership of the property, as in a special or general warranty deed, the grantee takes the property subject to any encumbrances on the property and takes only the interest held by the grantor in the property. The grantor does not state that he is the sole owner or that the property is free of debt or liens.
When Quitclaim Deeds Are Used
Quitclaim deeds are most often used for transferring property among family members, such as to heirs to keep the property in the family or among heirs to facilitate the sale of property. Quitclaim deeds are also often used in divorces, when one party quitclaims his interest in the property in order to dissolve the marriage and transfer ownership of the property from one spouse to another. Quitclaim deeds also let you add your spouse's name to or remove your spouse's name from the property's title after marriage or divorce.
Quitclaim deeds also serve a purpose in other property transfers. When you bought your home, the seller likely quitclaimed his interest in the property to you through a quitclaim deed. Likewise, when property is sold, a quitclaim deed should show all rights enjoyed by the former owner that transfer to the new owner. If, during a property transfer, you are aware of certain rights enjoyed by the former owner, make sure those rights are included in the quitclaim deed. Finally, quitclaim deeds are useful in estate planning and when setting up a trust. You can use a quitclaim deed in these situations to transfer property into a trust.
What is a deed of trust? Some states use this type of property deed instead of a mortgage, and it states that the lender cannot sell the property unless the borrower defaults.
Learn how to take someone of a deed to a house in case you need to assume responsibility for the house after a divorce or the death of a relative or spouse.