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View Full Version : Gift deed vs quit claim deed


edblackwood
Jul 30, 2012, 02:28 PM
Location: Texas, Tarrant County
Situation: Mother passes away in 1992. Leaving a very small house on very small land to her four children.

Three of the four children have no interest in their part of the house/land and have never paid taxes on any.
The fourth child has been paying taxes for years, even before mother passed away. And has been living in the house for the last 18 years...
The will/estate was never probated. Again this was 20 years ago when mother passed away.

The fourth child would like to get the property in their name.
Would a Quit claim deed or a Gift Deed be the vehicle and can it be done without having to pay taxes on it. (times are hard and we are not talking about much anyway.. )...
Land and house appraised by tax assessor for approx 40,000.
Much renovation ( siding, windows, electrical, plumbing ) etc, has been done on the house all at the expense of the 4th child...

AK lawyer
Jul 30, 2012, 02:38 PM
Location: ...
The fourth child would like to get the property in their name.
Would a Quit claim deed or a Gift Deed be the vehicle and can it be done without having to pay taxes on it. ....

A deed from the three siblings who don't want the property to the sibling who lives on the property? Yes, this will work.

There is no tax problem. The value is way under the gift tax exemption.

It would give him/her (I don't know why you wrote "their"; don't you know the sex of this "fourth child"?) color of title to the property, and this color of title would probably be sufficient. The late mother's estate should have been probated, but adverse possession would probably do the trick after all these years.

edblackwood
Jul 30, 2012, 02:44 PM
A deed from the three siblings who don't want the property to the sibling who lives on the property? Yes, this will work.

There is no tax problem. The value is way under the gift tax exemption.

It would give him/her (I don't know why you wrote "their"; don't you know the sex of this "fourth child"?) color of title to the property, and this color of title would probably be sufficient. The late mother's estate should have been probated, but adverse possession would probably do the trick after all these years.

But, do you suggest a quit claim deed ? Or Gift Deed ?

ScottGem
Jul 30, 2012, 02:57 PM
Quit claim

There is probably no gift here. A tax assessment is not necessarily a market value. But assuming it is, the sibling who wants the house can deduct the taxes paid over the last 18 years as well as the cost of improvements from the other siblings shares. So if more than $30K has been put into the property over the past 18 years, they may owe you.

LisaB4657
Jul 30, 2012, 08:28 PM
I don't think that adverse possession will apply here. The use of the property does not appear to have been hostile or exclusive.

The choices I see are to probate the estate and get an executor's deed, file a suit to quiet title or contact a title company and see what they recommend.

ScottGem
Jul 31, 2012, 03:12 AM
Lisa made a good point. I'm assuming the property is still in the mother's name. So no deed will work until the property is transferred into the heir's names It would be possible for the other siblings to waive their inheritance and let the probate court transfer directly to the sibling whi lives in the property.

AK lawyer
Jul 31, 2012, 05:34 AM
I don't think that adverse possession will apply here. The use of the property does not appear to have been hostile or exclusive. ...

I'm thinking hostile and exclusive on the part of all four siblings against the world. And, of course, OP could tack this possession to his/her subsequent possession pursuant to a deed executed at the present time.

If there is no need to sell the property any time soon, (I don't see that OP is in a financial position to probate the mom's estate - "times are hard and we are not talking about much anyway.."), there is no need to do file a probate petition.

LisaB4657
Jul 31, 2012, 06:20 AM
The cost of taking title by adverse possession, whether the OP does it today or sometime in the future, will cost a lot more than probate.

Is probate particularly expensive? I've never handled one for a client but I don't recall any substantial expenses the one time I was involved in one.

AK lawyer
Jul 31, 2012, 08:16 AM
...
Is probate particularly expensive? I've never handled one for a client but I don't recall any substantial expenses the one time I was involved in one.

I suppose it depends on the state to some degree. Publication of a notice to creditors can be somewhat costly. And creation of the required paperwork can be time consuming.

I have always been annoyed by the fact that what should be in many cases an inexpensive, do-it-yourself process instead costs widows and orphans thousands they don't have. This is, in many cases, simply because judges and legislators are too lazy or stupid to devise an efficient process. The probate codes have safeguards which in many cases result in huge unnecessary expenses.

And probate practitioners for the most part don't care. In fact, in this state, a pro se petition is prohibited by the probate code.

I will admit, however, it is slowly getting better. When my dad died intestate in '68, I was 19, and of course knew nothing about probate. As I recall, at that time it was necessary to hire a professional appraisal of the estate, in part because attorneys had adopted a (monopolistic) required fee schedule requiring them to charge a set percentage of the estate's value. That was later abolished somehow.