The gifting was done from 1996-2004 and was legally recorded in the county records. The land and the house on it was 100% gifted over the 6 year period. No release of the gifted property was signed at the time of the sale and the parents did not give the child any compensation after the sale of the property. The title company apparently missed the recorded gift deeds in their search and the sale went through. The child did not have knowledge of the gift deeds at the time of the sale of the house. Does the child have a legal right to the house purchased with the funds from the gifted property or a cash equivalent from the estate of the parents?

The child has to sue the parents or their estate for the value of the property.

Where the "gift" deeds filed and recorded at the courthouse ?
If so how did the title company miss it ?

They can sue both the parents and the buyers, I will assume the buyers purchased title insurance.

Also the title company may have some liablity, if there were valid deeds signed and recorded at the court house, they get paid to review all of this.

If the property was actually deeded over and recorded, the child owns it, and the new sale and deed would not be valid and could be contested. This would then cause the issue to be between the new buyer and the seller ( parents)

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Originally Posted by daveeb

... Does the child have a legal right to the house purchased with the funds from the gifted property ...

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No, the child doesn't have a right to that specific property.

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Originally Posted by daveeb

... Does the child have a legal right to ... a cash equivalent from the estate of the parents?

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Sure.

But the big question is this: Who should bear the loss from this, the buyer (or actually the buyer's title insurance carrier) or the parents (or actually their estates)? It appears that both were equally numb-skulled in letting this fiasco happen. Perhaps comparative negligence would apply and each would bear part of the expense.

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Originally Posted by daveeb

... The child did not have knowledge of the gift deeds at the time of the sale of the house. ...

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Depending on the wording of the recording statute in whichever state this is, the gift dead may or may not take priority over the sale deed. In some places, a deed must be "for value" in order to have priority.

Also, if the gift deed was never delivered to the child, it's arguable that the gift was never completed and, thus, was ineffective.