Kentucky allows a party to convey property by deed or will. A deed is a document that conveys land or an interest therein, such as timber, from one entity to another. A will is a document in which a person relates how their property should be given away after their death.
If there is no will, real property passes in accordance with Kentucky statutes regarding intestate succession. A deed and a will may provide that the party conveying the property has kept current on the property taxes, but neither document requires that the party conveying the property has paid the taxes.
Wills and Intestate Succession
In order for real property to pass by will or intestate succession, the personal representative of an estate must file an affidavit of real property transfer. The affidavit must contain the names and address of persons receiving each property that passes by will or intestate succession. The document should list the properties that are transferred by address, legal description or both.
The affidavit also must state the full fair market value of each property as estimated or established for any purpose in the handling of the estate. The affidavit is required to be signed by the personal representative, and this signature must be notarized.
What’s Required in a Deed Form
A deed must be recorded with the county recorder’s office to effectively transfer property. The deed must contain the name of the first party, also called the seller or grantor, and their mailing address. It must also contain the name of the second party, the buyer or grantee, and their mailing address. In addition, a deed must contain a consideration statement, which sets out the value of the property.
A deed must provide a legal description of the real property, the source of the title, a preparation statement and a return mail address. The grantor is required to sign the deed, and this signature must be notarized. The grantor and grantee must sign the consideration statement, and their signatures must be notarized. The document needs to be filed in the county where the property is located.
Transfer Taxes on Conveyance
When real property is conveyed by deed, the state of Kentucky collects transfer tax on the consideration in the deed. The tax is computed at the rate of $0.50 per $500 value of the property, or any fraction thereof. The grantor is required to pay the transfer tax.
If the deed is a gift or indicates nominal consideration, the tax must be paid on the estimated price that the property would bring in an open market. A deed cannot be recorded unless the real estate transfer tax has been collected. The tax should be collected only once on each transaction. The tax should be paid in the county in which the property is conveyed, or in which the greater part of the property is located.
Quit Claim Deeds
A party can attempt to use a quitclaim deed to transfer title, but the transfer may not be full or effective. A quitclaim deed passes any title, interest or claim a grantor may have in the premises, but it does not guarantee that the grantor’s title is valid. It does not contain any warranty or covenants for title. A quitclaim deed must adhere to all the recording requirements for other transfer deeds, except for the specific source of title.
Definition of Warranty Deed
There are two types of warranty deed, general warranty deed and special warranty deed. A general warranty deed guarantees that the grantee owns the property and holds clear title to it. A general warranty deed further provides that there are no liens or mortgages against the property.
Typically, a grantor uses a general warranty deed to convey real property. The grantor has the right to sell the property, but if there is an issue with title, the grantor is liable for the concerns.
A special warranty deed, or grant deed, offers less protection than a general warranty deed. It guarantees that there were no encumbrances on the property while the grantor had title in their name. The grantor is not liable for title issues that arise from matters before they owned the property.
Deed of Correction
A deed of correction can be used to clear up a defect in title or to correct a mistake. Concerns include the correct number of acres or the source of title for a property. A deed of correction does not convey an interest in land.
The original grantor and grantee must be the same in the deed of correction. If a deed includes any parties beyond these entities, it is not a deed of correction.
What to Include in the Deed of Correction
A deed of correction must contain:
- Full names of the grantor and grantee.
- Mailing addresses of the grantor and grantee.
- Consideration statement.
- Legal description of the property.
- Source of title.
- Reparation statement.
- Return mail address.
- In-care-of address for tax bill.
The document is required to state that it is a deed of correction and must refer to the deed that it is correcting. The grantor must sign the deed, and the signature must be notarized. The grantor and grantee must sign the consideration statement, and their signatures must be notarized. The document has to be filed in the county clerk’s office where the property is located. A transfer tax applies only if the consideration amount has changed. Filing fees vary by county; the filing fee for a deed of correction in Webster County is $46.
Deed of Release
A deed of release is also known as a satisfaction of mortgage or discharge of mortgage. The document must state whether it is a whole or partial release. A partial release requires a description of the property being released. This deed must contain:
- Name of the person or entity releasing the obligation.
- Name of the individual or entity being released.
- Mortgage book and page reference being released.
- Deed book and page, if there was a vendor’s lien.
- Preparation statement.
- Return mail address.
The document must be signed by the party or parties executing the release, and their signatures must be notarized. The filing fee for a deed of release in Webster County is $46.
Jessica Zimmer is a journalist and attorney based in northern California. She has practiced in a wide variety of fields, including criminal defense, property law, immigration, employment law, and family law.