Comparing Quitclaim Deeds to Lady Bird Deeds

By Marie Murdock

Although a warranty deed is the most commonly used form to convey property, there are other types of deeds that could be more in line with your intentions. Deeds may convey varying interests in property and different types of deeds may be used for different purposes. Two types of these deeds are the quitclaim deed and the "lady bird" deed, often referred to as an enhanced life estate deed.

Interest Conveyed by Quitclaim Deed

Quitclaim deeds basically convey whatever interest a person has in a property. This type of deed in no way implies that the grantor or seller has any interest in the property, but whatever interest he has, he conveys.

Interest Conveyed by Lady Bird Deed

Although drafted as a conveyance document, full ownership title to grantor's property under a lady bird deed doesn't pass to grantee until the moment of the grantor's death. The grantor will continue to have full use of the property during his lifetime including the right to sell the property to another individual as if the deed had never been prepared. Even though a grantee is named under this deed, grantee's creditors may not attach a lien to the property during grantor's lifetime. This differs from a standard life estate deed where title to the property actually conveys in the deed and the grantor only reserves a right to use the property during his lifetime. Many states allow standard life estate deeds; however, only a few have laws that recognize the use of a lady bird deed.

Warranties

Quitclaim deeds offer no warranties of title, and title companies may offer very limited coverage or none at all if asked to issue a title policy based on one. A ladybird deed may transfer title with warranties in the deed whereby the grantor warrants that he has full ownership of the property at the time of the conveyance. Quitclaim language, however, could also be used in a ladybird deed, with the seller deeding whatever interest he has to pass at his death. The two types of deeds are not mutually exclusive.

Estate Planning

As the death of the life estate holder removes any interest he had in property under a lady bird deed, the property will not pass through the estate or probate process. Lady bird deeds are often used as part of the estate planning process for just this reason. Parents often convey title to one or many of their children in this manner, with the reservations and appointments in the deed preventing the children from selling the property and forcing the parents to leave.

Family Planning

Quitclaim deeds are often used in domestic or family situations, such as a divorce where one spouse conveys all interest in the property to the other. A husband and wife may also quitclaim their interest in rental property to their corporation or limited-liability company to limit their personal liability.

About the Author

Marie Murdock has been employed in the legal and title insurance industries for over 25 years. Murdock was first published in print in 1979 and has been writing online articles since mid-2010. Her articles have appeared on LegalZoom and various other websites.