Real estate has a long history of being one of the best investments people can make. For many Delaware residents, their homes will end up being the most expensive property they own. Knowing how to transfer ownership of property legally is an essential aspect of estate planning. The most common way to transfer real estate property ownership is to sell it to a buyer. However, there are several ways to transfer your homeownership without selling it. You may want to transfer property to a loved one or a charity. If you are interested in transferring property within Delaware, here is what you need to know.
The Process of Transferring Property
The process of transferring property ownership to someone else is relatively straightforward. However, a lot of planning and thought should go into the transfer. You can choose to implement many types of deeds, and an attorney can explain all of your options and ensure the process goes through smoothly and legally. Before you can transfer property ownership to another person, company, or charity, you will need to complete the following steps:
- Identify the recipient or donee
- Discuss the terms and conditions of the transfer with that person
- Complete a change of ownership form
- Change the title on the deed
- Hire a real estate attorney to prepare the deed
- Notarize and file the deed
Before you begin the process of transferring your property, we recommend carefully considering the recipient of your property. Deed requirements differ based on the type of deed and based on state laws. A Delaware attorney can help you understand the different deeds available in Delaware.
The Basics of Transferring Property by Deed
The process of transferring property will happen by way of a deed. A deed is a legal document that transfers one person or company’s ownership rights to another person or entity. The deed itself is the official proof that real estate has been transferred. A property owner can transfer land on its own or land with a house or other building on it through a deed. In Delaware, add must include all the following information:
- An indication that it is a deed
- A description of the property being transferred
- The signature of the person or entity that is transferring the property
- Information regarding who is taking ownership of the title of the property
Additionally, the deed must be validly delivered to the person or entity taking ownership of the property. The deed should also be filed with the appropriate authority. Working with an attorney to transfer property through a deed can be helpful. Your attorney can ensure that the deed includes the legal description of the property so it can be recorded accurately and so you can avoid legal problems down the road. The type of deed you use to transfer property depends on your title. If you know that you have a valid legal title, the deed you used to transfer property will be different than if you are unsure about the title’s integrity. We will discuss some of the most common types of deeds available.
Delaware recognizes general warranty deeds and special warranty deeds. General warranty deeds are often considered the most common way to transfer real estate. These types of deeds are used when you are confident that the title to your property is valid and marketable. General warranty deeds also offer buyers protection against title challenges. When you transfer property through a general warranty deed, you will assert that there are no debts or liens on the property. A special warranty deed provides some of these protections but is often used as a compromise so that the seller receives some warranties, but not all.
A property owner can use a gift deed to voluntarily transfer ownership of their property to a family member or charity. When people want to give a delayed gift, they often use gift deeds. Gift deeds are revocable, although they can also be irrevocable. The gift he needs to contain language that explicitly states that no compensation is required or accepted. The donor is responsible for paying any applicable gift taxes.
Transfer on Death Deeds
Property owners can arrange for the property to transfer upon an owner’s death through the deed. If you own property with someone else jointly, you can designate the ownership to be with a “right of survivorship.” Property owned in joint tenancy automatically transfers to the surviving owner when the other owner passes away. In this type of ownership, the surviving owner does not need to go through the probate process to transfer the property when another owner dies. It will take some paperwork to show that the property’s title is held solely by the surviving owner.
Delaware, as with many other states, recognizes joint tenancy. Property owner joint tenancy will automatically pass to the surviving owner or owners when one owner passes away. In Delaware, each owner of the property, called a joint tenant, owns an equal share of the property. For example, if two friends own a property as joint tenants, they will each own 50% of the property.
Delaware also recognizes tenancy by the entirety, which is similar to joint tenancy but is allowed only for married couples. Many married couples who own a home will use this type of joint ownership so that the surviving spouse will automatically own all of the property when the other owner passes away.
Contact a Delaware Transfer Property Attorney
Giving real estate to a friend, a loved one, or charity is a kind gesture. However, the process may not be as straightforward as you had anticipated. Giving and receiving property can come at a cost to the donor and the recipient. Whether you are transferring property as part of your estate plan or in a real estate transaction, working with an attorney can help you tremendously. Contact Schwartz & Schwartz today to schedule your initial consultation to learn more about how we can effectively represent you.