As a real estate agent or a mortgage broker, you’ve probably received many questions from clients regarding the transfer of a deed. Some homeowners may want to transfer a property to a family member or business associate. Others may wish to donate a property to charity. All the options involve the transfer of a deed. Deed transfer requirements differ depending on the type of deed and the state’s laws. Makes sure your clients know that they will need specific deed forms to start the transfer, and they must follow all state-specific requirements.
Transfer on Death Deed
A TOD, Transfer on Death Deed (sometimes called a beneficiary deed), allows the owner complete control of the property until they pass away. In this event, the transfer will be made to a select individual. This type of transfer is one of the most common ways for a deed to change hands to family members. The owner can also change their mind at any time and change beneficiaries. Using a TOD means your client can avoid going through probate.
A gift deed allows an owner to transfer the deed to a family member or charity voluntarily. Property owners usually prefer this option when they want to make a delayed gift. Gift deeds are revocable, but they can be irrevocable as well. To legally be considered a gift, the deed must explicitly state that no compensation is required. The donor of the gift deed is always responsible for paying any applicable gift taxes.
It’s important to remember that the transfer of a deed is a process that requires the guidance of professionals, and it must be done correctly to protect all parties. Be sure your clients understand that the entire process must be researched beforehand, and they plan for all necessary taxes. Have questions about a deed transfer? Innovation Title can help! Give us a call today.