Video

Good morning folks, it’s Andy Stautz with Stautz Law. I am back today for another topic on Indiana probate and estate planning. Today we’re answering a question I saw in a comment to one of my previous videos.

The question is, Is a quitclaim deed the same as a transfer on death deed?

Quitclaim Deeds Are Not the Same as TOD Deeds

The answer is no, they are not the same. So I’ve talked in a bunch of places about transfer on death deeds, which I use pretty routinely as part of estate planning.  

How Quitclaim Deeds Work

Quitclaim deeds are different. So a quitclaim deed at its most basic is the owner, whoever makes the deed, saying, I quit, I quit, I give away my interest, It’s done. I make no claims on it. You’re quitting your claim.  

That can be useful sometimes. I mean, if you’re just trying to just give everything away, just make sure it’s gone, you know, especially to “quiet” titles. If there’s a question about who owns what and one person says, I sign a quitclaim, I don’t own it, then that’s great because it’s final, it’s immediate 

But that makes it kind of not a great, it doesn’t really make an estate planning tool because it is immediate, it’s irrevocable, no take backsies. Once you’ve signed a quit claim and given away your interest, it’s gone, right? It belongs to whoever you gave it to.  

Quitclaim Deed Traps

So sometimes I’ll see a quitclaim deed mistakenly used as part of a DIY estate plan, right? Someone will quitclaim a portion of their house to their heir or heirs. And what that does is splits up property ownership, right? It gives those other people immediate ownership of part or all of the house. That’s usually not something you’re trying to do because like I said, that means they actually own the house with you and they are jointly responsible for property taxes and other upkeep items. It also means they could conceivably sell their share or a creditor could come after their share. And if you change your mind, you can’t change, you can’t undo it without everybody’s cooperation, which might or might not be available. There are also tax consequences. Those get complicated really fast, but you’ve basically made a big gift.  

So quitclaim deeds are powerful, but dangerous, right?  

Comparing Transfer on Death Deeds

Transfer on death deeds are less dangerous because all a transfer on death deed does is gives instructions to the county government on how to pass your property after you die. Okay, it’s instructions for later.  

And even though you’re recording the deed now and naming a beneficiary now, that beneficiary doesn’t have any immediate right in your property. So if you move, you leave the transfer on death deed behind. If you change your mind, you can rewrite and re-record a new transfer on death deed. You don’t need the beneficiary’s permission to do that.  

And the beneficiary can’t control anything in the present. Their creditors can’t reach their interest because they don’t have a present interest. They can’t sell their interest because they don’t have an interest, right?  

Conclusion

So a transfer on death deed, instructions for later. A quitclaim deed, washing your hands of it right away. So that’s kind of general differences. Is a quitclaim deed the same as a transfer on death deed? No, not at all. They both have conceivable uses though, as I’ve tried to just discuss.  

To figure out which one you need in your scenario, that’s specific legal advice there. So you need to call an attorney. If you call me, talk to me, that’d be great. And we can discuss your project and how to accomplish your goals with the right type of deed for you. But as a general overview, I hope that answered the question and resolved some confusion. And like I said, for specific legal advice, reach out and we’ll work together. I hope that was an enjoyable talk and bye for now.