Are you considering giving someone a quit claim deed seek the advice of an attorney first
We receive a number of inquiries on when it is proper to use a Quit Claim Deed as a method of granting title to another person or entity (i.e. LLC, S-Corp, Trust, etc). Many people use a Quit Claim Deed to move title into an entity with some form of liability protection, or as a cheap means of estate planning.
We have all heard real estate gurus and professionals talk about “Quit Claiming” properties out of your personal name for asset protection. More and more people are adding their children or relatives to titles to property as a means of transferring property at death without the necessity of probate. The main problem with using a Quit Claim Deed is that it essentially nullifies the title policy that was obtained when the property was purchased. Once title is conveyed to the new entity, or to new additional owners, the Quit Claim warrants nothing for the new title holder. If a title issue was to come up after the property had been Quit Claimed to the new entity, it is highly likely that the title policy would not cover the claim.
The easy solution to this problem is to use a Warranty Deed instead of a Quit Claim Deed. The reason being that a Warranty Deed not only conveys ownership, but warrants that the title is clear of encumbrances. As a result, if an issue with the title arises down the road, the grantee would have legal recourse against the grantor (you) and the title policy would be in effect to cover the claim.
Always consult with an attorney before transferring title to any person or entity. It is imperative that up ask the right questions and confirm that any conveyance is done in the right manner and with the proper protections in place.
If you find yourself in such a position it is best to consult an attorney with substantialreal estate and title law experience. There are so many different circumstances that a proper answer to your particular problem can only be obtained by a trained and experienced lawyer.
