When you want to convey a piece of property to someone else, choosing the right way to go about it is essential. One tool that you could use to convey a piece of real estate is a gift deed. This is a type of deed that is commonly used to pass property between family members.
What Is a Gift Deed?
When using a gift deed to convey a piece of real estate, there cannot be any monetary compensation involved. The only consideration for this kind of deed is love and affection. This kind of deed is commonly used by parents who want to give a piece of real estate to their children. When you use a gift deed, you give the property to the other party in good faith and you convey any warranties that you may have in the property as well.
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When you wish to use a gift deed to convey property to another party, you have to meet the requirements of state law. You will need to use an official document that includes your name as well as the names of the recipients. The legal description of the property must be included on the deed. You will need to sign the document in front of two witnesses for this process to be considered legally valid. Additionally, the witnesses can have no interest in the transaction.
Revocable Vs. Irrevocable
When creating a gift deed, you could choose between one of two different types. You can choose to create a revocable or an irrevocable gift deed. With a revocable deed, you can legally revoke the gift at any point after you give it to the other party. With an irrevocable gift deed, once you give the gift to the other party, you cannot take it back. Choosing the right type of deed is important in case you feel that there is a chance you may need to take the gift back at some point in the future.
Transfer of Property
With a gift deed, the donor can decide when the property will be transferred to the recipient. In many cases, the donor will specify that the property will be transferred to the other party when the donor dies, as the donor may wish to retain the use of the property for the rest of his life. In other cases, the donor may wish to give the property to a charity or some other group immediately. In that case, the ownership of the property can be transferred immediately.