As you approach old age, you may be wondering how to transfer your real estate holdings to your adult children. There are several reasons why seniors may wish to transfer their real estate: Some people decide to unburden themselves of their house and travel the world; others make a choice to downgrade to a more manageable living space. For some seniors, the physical strain of maintaining the property may no longer be an option.
Whatever your reason, you are now wondering how to transfer your property. One of the most common ways is through the transfer of a deed. There are a few different deeds to choose from, and you should think carefully about which one is best for you before making a decision.
1. Gift deed
If you intended to give the property to your child as a gift, you might be interested in using a gift deed. This type of deed does precisely what its name implies: A parent can use this deed to transfer ownership of real estate to an adult child as a gift. You must have a gift deed legally drafted and signed by two disinterested parties.
2. Quitclaim deed
Transferring property with a quitclaim deed is a way to shield your child from the potential financial ramifications of owning real estate. With a quitclaim deed, you would remain on the mortgage, even though you sign away any claim to the property. Unless you remove your name from the mortgage loan, you would be legally responsible for any outstanding mortgage payments.
3. Transfer on death deed
Sometimes, parents are motivated to transfer property holdings to their children to avoid probate. If you wish to retain control of your property until your death but spare your children from the probate process, then a transfer on death deed may be right for you. These deeds name the real estate property's new title holder but do not go into effect until the original title owner passes away.
Selecting the right deed
Still confused about which method is right for you and your kids? You may wish to contact an estate planning attorney. A skillful attorney can help guide you through the process of passing your real estate to the next generation.