If you are unfamiliar with the term “quitclaim deed,” this blog is for you.
In simple words, a quitclaim deed is used when an owner drops a complete claim on their property and passes it on to the buyer. Now, as simple as it sounds, it actually is not. Unlike other deeds, quitclaim assures zero warranty for buyers.
Now that you have a basic idea of it, let us also tell you that it should not be a part of regular real estate transactions. Quitclaim deeds must be done only in certain situations, usually outside regular real estate sales. Otherwise, the buyers might be at risk.
So, how do you figure out when to use it? Let’s say that the best people to answer that question for you would be quitclaim deed lawyers. A good attorney can respond to all your queries related to quitclaim deeds.
Let us give you a little more insight into how quitclaim deeds work. Eventually, we will move on to why you will need a lawyer for one.
How Do Quitclaim Deeds Work?
A quitclaim deed is recognized when a written deed form is submitted. It has to state that the current owner transfers all his claims to the seller. It must contain the following information:
- The legal background of the property
- The geographical placement of the company
- Names of the buyer and the seller
- The property transfer date
- Monetary transactions, if any
Seems a little complicated to do on your own, doesn’t it? This is why you need a lawyer. Read on to find out more.
Why Do You Need a Lawyer for Quitclaim Deeds?
Taking both parties’ interests into account, a lawyer will be the right person to mediate the process. Here’s what they can do:
- Valid Interest
No owner who does not have a valid interest in their property must be allowed to transfer their claim through quitclaim deeds. As there is no title necessary, it may land the purchaser in trouble in the future. To gain an appropriate understanding of the sellers’ interests, a lawyer is necessary.
- Tax Exemption
In certain states, when the owner is a permanent resident of the property, they avail tax exemptions. There are chances of that exemption being canceled when there is a transfer of ownership. However, there are some ways to keep the exemptions. Such loopholes need to be suggested by the lawyer.
- Gift Tax Repercussions
Sometimes, the owner may utilize quitclaim deeds to gift the property at a rate less than its full value. A thing to keep in mind is that there is usually an annual exclusion amount for gifts. If the amount exceeds the annual exclusion, it needs to be reported legally. This is another place an attorney can assist you with.
These are just a few ways a lawyer can be helpful. There are several other reasons for you to hire a professional in such situations.
We all like keeping things quick and easy. Well, quitclaim deeds fit that definition pretty well, But you should realize that just because it is easy, it might not be safe. So, make sure you have an attorney by your side to guide you through each step of it.
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