Legal Question in Real Estate Law in California

Re: real estate

We get this nearly identical question about three times a week. The standard answer is pretty much as follows:

1. The form is a deed.

2. There are two kinds of deeds in common use in California, the grant deed and the quitclaim deed. The main difference is that the grant deed conveys title (or part of title) with warranties, while the quitclaim deed is a surrender of rights, if any, in the interest purportedly conveyed. Either one will work fine.

3. The requirements of a valid deed include the names of the grantor and the grantee, a sufficient legal description of the property, a statement of the interest therein to be conveyed (e.g., a fee, a 50% interest in the fee, a life estate, or whatever), and words of grant or quitclaim.

4. A deed does it work to transfer the property or interest therein when it is filled out, signed and delivered to the grantee.

5. While a non-notarized deed is valid between the parties to it and others with notice thereof, a deed really ought to be notarized and recorded. Failure to record a deed makes it a weak instrument because persons without notice of the deed may be unaffected by it and can acquire adverse interests that will hold up in court.

6. Adding someone's name to your property is a BAD IDEA about 85% of the time. While it may avoid probate or seem like a generous gift, there are much better ways to accomplish these purposes - e.g., by trust, or even by will. Have an attorney explain the gift tax, the capital gains tax, the Prop. 13 reassessment, the Uniform Fraudulent Transfers Act, and the advantages of a living trust over joint tenancy. Then decide if your deal is in the 15% that make financial sense or whether a huge portion of your value will sooner or later go to various tax collectors.

Re: real estate

We get this nearly identical question about three times a week. The standard answer is pretty much as follows:

1. The form is a deed.

2. There are two kinds of deeds in common use in California, the grant deed and the quitclaim deed. The main difference is that the grant deed conveys title (or part of title) with warranties, while the quitclaim deed is a surrender of rights, if any, in the interest purportedly conveyed. Either one will work fine.

3. The requirements of a valid deed include the names of the grantor and the grantee, a sufficient legal description of the property, a statement of the interest therein to be conveyed (e.g., a fee, a 50% interest in the fee, a life estate, or whatever), and words of grant or quitclaim.

4. A deed does it work to transfer the property or interest therein when it is filled out, signed and delivered to the grantee.

5. While a non-notarized deed is valid between the parties to it and others with notice thereof, a deed really ought to be notarized and recorded. Failure to record a deed makes it a weak instrument because persons without notice of the deed may be unaffected by it and can acquire adverse interests that will hold up in court.

6. Adding someone's name to your property is a BAD IDEA about 85% of the time. While it may avoid probate or seem like a generous gift, there are much better ways to accomplish these purposes - e.g., by trust, or even by will. Have an attorney explain the gift tax, the capital gains tax, the Prop. 13 reassessment, the Uniform Fraudulent Transfers Act, and the advantages of a living trust over joint tenancy. Then decide if your deal is in the 15% that make financial sense or whether a huge portion of your value will sooner or later go to various tax collectors.