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Quick Claim Deed or Quit Claim Deed?

Quick Claim Deed“Quick Claim Deed” or “Quit Claim Deed”? Which one is it and how does it work? The term is not quick claim deed, but rather quit claim deed (even though using one is pretty quick). When you use a “quit” claim deed you are “quitting” or leaving any interest you have in the deed.

Quit claim deeds are sometimes used to transfer properties to different entities for asset protection purposes. This transfer, if it is not been done correctly, can trigger a problem with the due on sale clause of the mortgage. If you want true asset protection, the trick is to transfer the property correctly, so as not to flag the mortgage company.

Often when trying to get asset protection, people will quit claim (not quick claim) deed their property into several different land trusts. Unfortunately, this does not work. It doesn’t matter who the beneficiaries of the land trusts are, land trusts are standard revocable trusts and as such will not give any asset protection. Land trusts may provide a little anonymity. This is a very small advantage. Let’s face it. Your tenants, contractors, and creditors associated with your property know who you are. The only thing you are hiding is property from a general search for property ownership in the recorder’s office. The fact that you don’t show up as owning a bunch of properties might save you from a frivolous lawsuit, but most lawyers don’t check the county records before they file a suit, they have other more effective means of finding what you own.

The other option is to quit claim deed your properties into separate LLCs (Limited Liability Companies) or possibly separate S corporations, or even limited partnerships. A lot of people quit claim property to themselves to their LLC or S Corporation, but if you use a quit claim deed, you have to be careful, because any warranties that should follow the deed will not follow the deed if a quit claim deed is used. When you transfer property into an LLC or corporation, it is best to use a warranty deed, and insure that any warranties transfer along with ownership of the property.

If you are transferring property from yourself to an LLC or S Corporation, the LLC is the best choice. There are a number of accounting advantages in the LLC and maintenance is much easier. Some states let you have “series” LLCs that will cut the cost, because you set up one LLC, and then it can establish separate legal divisions within it. This will save time and additional charges for forming several LLCs. If your property is in California or a state where the LLC cost is high, then just use one or two LLCs and divide the properties between them.

When you set up the LLC and quit claim deed, not quick claim deed, property into it, what happens to the mortgage? Most mortgages have “due on sale clauses.” The mortgage company will view moving the property to an LLC, corporation, or limited partnership as a “sale.” When the mortgage company discovers that you have transferred the property, they have the right to call the loan.

It is easy for the mortgage company to find out you have moved the property since the tax notices will not be in your name any longer. They will come in the LLC’s name. Also, the insurance coverage will have to be changed, and the mortgage company will see that change. It is important to be certain to change your insurance when you quit claim deed the property ownership to the LLC. You do not want to have a fire and figure out that the property is not covered because it isn’t your property any more.

Using a quit claim deed to move property to a living revocable trust is not a sale, by federal law. In the trust, you should be the grantor (the party who makes the trust), the trustee (the party who manages the trust) and the beneficiary (the party who gets the benefit of the trust). A trust that meets these criteria is called a “grantor trust.” Under Federal Law, no bank, mortgage guy, property tax guy, casualty insurance company or anyone else can call the loan due if you have a true grantor trust. (California and a few states require “notice” that you are using a grantor trust, otherwise they will assume otherwise, and they will try to up the property taxes on the transfer of ownership.)

Note that companies like LLCs, corporations, or limited partnerships, do not get the special treatment. Neither do land trusts, because in most cases you are not filling all three positions (grantor, trustee, and beneficiary), and it is therefore not a grantor trust. In all of these cases the mortgage company can call the loan once you use a quit claim deed.

You may think to buy a property directly in the name of an existing LLC. It might be a good idea, and allows you to get the title directly in the name of the LLC– if you are paying cash. If you need a loan, you are still going to be signing personally for the loan. That’s a given. You are right back to square one.

There is no question that the mortgage industry does not make asset protection easy, but there is usually a “work around” or a way to “bend the rules” and achieve the asset protection you want.


  1. Does a living revocable trust give good asset protection?

    I would have thought that since it’s revocable, you still control the property, so it would be at risk in a lawsuit.


  2. Roger,
    A living revocable trust does not provide asset protection while you are alive. You can use it to create some protection after you pass away though, so that the assets are protected for your children, or should I say from your children.

  3. My husband wants to add me to his deed. What form do i use.

  4. LouAnn,
    If you are being added to the deed you will want to use a warranty deed.

  5. My mother wants to sign a quick deed so that only her children have claim to her property in the event of her passing. Will this protect it from a greedy daughter or son in law from rights to her property?

  6. Jan,
    A quitclaim deed would transfer the property to her children but would be considered a gift. You may have tax liabilities because of it. If your mother made a trust or will that says who the home is going to go to then the home would go to that person when she passes away and would not be a gift but an inheritance, which has a better tax consequence.

  7. My home has been sold l am on my dads deed how do l rectify this with them holding his property as my assect?

  8. Is there a way to quick claim the house to one of my kids l am not on the mortgage,but my dad put me on the deed my house was sold in a auction & l don’t want him penalized for my situation & they want the balance l don’t want a lien put on his house?

  9. You will need to make a deed from you to your father.

  10. You can quitclaim the property to a kid or just to your dad. The ideal situation would be to have your dad set up a Trust and have the property deeded to the Trust. This would protect the property from your claim, from probate, and would allow you to get a step-up in basis.

  11. My brother own a house that I helped him to buy, he is moving to another state and he wants to transfer the house on my name and my husband. I know that I have to use the Quick claim deed, after that what other step should I take.

  12. Norman,
    Once you have the property deeded to you then you own the property. You will just need to get the deed recorded.

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