Whenever a home is transferred whether by inheritance, probate sale,
trustee sale, short sale, eminent domain, etc. a deed is involved. A deed
is defined as a "written instrument by which land is conveyed." Black's
Law Dictionary 8th ed. (West Group, 2004). For example, if buyer
purchases Green Acre from seller, buyer will transfer ownership of Green
Acre to seller by giving seller a deed to Green Acre. In the context of a
modern real estate transaction, the escrow/title officer at closing will
have the seller sit down and sign the deed transferring ownership of the
home to buyer.There are three types of deeds used in real property
transactions: grant, warranty and quit-claim. However, due to the advent
of title insurance, only grant and quitclaim deeds are used in
California. A grant deed is a conveyance that includes all the implied
warranties and covenants of title. CC § 1113. In non-legal speak, this
means that if seller did not own the property when they transferred it to
buyer, for instance seller sold the home to somebody else a few months
beforehand, then buyer could turn around and sue seller for breach of
covenant of title. A quitclaim deed only transfers the interest seller
had at the time of the transfer. Klamath Land & Cattle Co. v Roemer
(1970) 12 CA3d 613. Thus, if seller did not own the land that they
transferred to buyer and buyer later learns of this, buyer would have no
recourse against seller.The reason why deeds are relevant for estate
planning purposes is because a home will need to be transferred into the
trust in order for the trust to own the home. Thus, the estate planning
attorney will typically prepare a deed transferring the family home into
the trust the attorney just created for their clients.Most stationary
stores or a county law library site have quality fill-in forms. The
problem is that most people do not understand what they are filling out.
For example, a deed could create gift tax, potential property tax re-
assessment, the imposition of the documentary transfer or the possibility
of judgment attachment, etc. Consequently, I have seen a few cases where
families decided to engage in do-it-yourself estate planning by executing
deeds in which ownership is transferred amongst family members. Typically
the results have been disastrous because of the adverse tax consequences
that followed.Executing or interpreting a deed is not an overly
complicated task for an attorney. An attorney should be able to resolve
most deed problems within a few hours. This means the attorney fee should
not be the cost of your monthly mortgage payment.