People tend to use the terms “title” and “deed” synonymously when discussing real estate, but they’re actually two distinct legal concepts. “Title” refers to someone’s ownership interest of a property, and their rights to use the property. Individually-owned real estate is titled in the sole-owner’s name, while jointly-titled property will include one or more additional owners as joint tenants, tenants in common, or tenants in the entirety (ARS 33-431). Deeds, on the other hand, are legal documents that transfer title from one person or entity to another.
Four major types of deeds
Deeds must always be in writing, and in most states, they need to be recorded in the courthouse or assessor’s office to be considered fully binding. A deed can be short and simple, or it can be several pages with numerous covenants, restrictions, and special granting clauses. Most of the time, deeds are prepared by an attorney.
While there are a number of different types of deeds, there are major four types that are most commonly used:
- General warranty deed – provides the highest level of protection for the party who is buying the property. The deed will usually include significant covenants or warranties that are conveyed by the grantor to the buyer/grantee.
- Special warranty deed – doesn’t provide as much protection for the buyer/grantee, as the grantor provides fewer warranties.
- Bargain and sale deed – a special-use deed that offers no protection for the buyer from encumbrances.
- Quitclaim deed – a limited-use deed that provides the least amount of protections for the buyer. In most cases, there are no covenants, warranties, or restrictions.
Quitclaim deeds (aka quit claim or quick claim deeds) offer no promises from the grantor. These deeds transfer all of an owner’s interest in the property, though they obviously can’t transfer the title of other owners if there are multiple parties with title to the property. Note that deed transfers of any kind don’t affect any mortgage on the property—only the title of ownership.
Quitclaim deeds are most commonly used when property is being transferred without a traditional sale, such as when property is transferred between family members, when couples divorce, or when property is transferred to a living trust. In all of these scenarios, probating the property is unnecessary.
What to include on a quitclaim deed
If you’re writing a quitclaim deed to quickly transfer property to a family member or trust, you’ll want to include the following:
- A legal description of the property
- The county where the property is located
- The date of the title transfer
- The names of the grantor and grantee
- The purchase price for the property (if applicable)
In most cases, the grantor, witnesses, and the grantee will need to sign the deed in the presence of a notary public. After the deed has been notarized, it’ll need to be filed with the county clerk in the county where the property is located.
Other assets that are not subject to probate
Assets that have a designated beneficiary have the potential to transfer title without going through probate. As long as the account lists a living beneficiary other than the decedent or the decedent’s estate, the financial institution holding the assets will transfer title of ownership automatically when they receive a copy of the owner’s death certificate. These assets are commonly referred to as “non-probate” assets thanks to their ability to bypass probate. Non-probate assets include:
- Bank and brokerage accounts with a transfer-on-death or payable-on-death beneficiary
- Real estate owned as joint tenants or as tenants in the entirety
- Retirement accounts (401k, IRA)
- Life insurance policies
What to do if property needs to transfer through probate
Probate is necessary when someone passes away with individually-titled assets. Without a probate judge’s action, a decedent’s individually-titled assets would remain frozen indefinitely. If you are a beneficiary or a legal heir to a decedent’s individually-titled assets, here’s what you can expect in the probate process:
- Someone needs to petition to open probate
- The court will appoint a personal representative
- The personal representative will serve notice of probate to all interested parties
- The personal representative will inventory and value the estate
- The personal representative will settle the estate’s liabilities
- The personal representative will distribute the estate’s residual assets
If the decedent left a will, the party in possession of the will is required to submit the will to the county court within a reasonable amount of time (usually 30 – 120 days of the decedent’s passing). Whoever submits the will typically submits a petition to open probate. If the decedent didn’t leave a will, or if the party in possession of the will fails to submit it, any interested party can petition to open probate (that includes beneficiaries, legal heirs, and even creditors).
Appointing a personal representative
If the decedent had a will, their will should nominate someone to serve as the estate’s executor or personal representative. If the decedent didn’t have a will, the probate court can appoint a personal representative (usually a family member), or they can appoint a third-party special administrator. Either way, personal representatives and administrators have the same responsibilities, and will be in charge of handling the estate’s affairs through the probate process.
Serving notice of probate
The first item of business for the personal representative will be to serve notice of probate to the estate’s known beneficiaries, legal heirs, and creditors. He or she will also need to post an ad in the local paper once a week for three weeks, to notify any unknown creditors and interested parties that the estate is open for probate. Beginning the day that the first newspaper ad is run in the local newspaper, the estate’s creditors will have four months to submit claims to the estate.
Gathering the estate’s assets
Before the personal representative can pay any bills and distribute assets, they’ll need to have a full inventory of the size and value of the estate. Liquid assets like bank and brokerage accounts are simple to value with the most recent account statement, but illiquid assets like real estate, vehicles, and valuable personal possessions may need to be professionally appraised for fair market value.
Settling the estate’s liabilities
Once the estate’s creditors have been given sufficient time to submit their claims, the personal representative will need to settle the claims using the estate’s assets. The personal representative will also need to final a final income tax return and estate tax return (if applicable) and pay any taxes due.
Distributing the estate’s residual assets
After all of the estate’s liabilities are settled, the personal representative will finally be allowed to distribute the estate’s remaining assets (referred to as residual assets). If the decedent left a will, the assets will be distributed according to the instructions in the will. If there isn’t a will, the decedent’s assets will be distributed according to the state’s intestacy laws.