In order to transfer an ownership interest in a piece of real property, the grantor will need to execute a deed. There are several types of deeds that can be used in Illinois. The most frequent deed that is used is a Quitclaim Deed.
What Is a Quitclaim Deed?
This legal document transfers property ownership but without warranties of title. Unlike a general warranty deed, an Illinois quitclaim deed does not assure a free and clear title. It provides no guarantees regarding the validity of the property’s title. This could potentially mean that the grantor, or the person transferring property, might not have a valid ownership interest.
Despite this risk, quitclaim deeds remain useful. They have basic requirements:
- A legal description of the property
- Names of the transferor and recipient
- The date
- Notarized signatures
Quitclaim deeds are incredibly useful in certain scenarios, as a quitclaim deed makes property transfers between family members, clarifying ownership in cases of inherited property, changing title holding methods, and settling property disputes in divorce cases much simpler.
Let’s examine how quitclaim deeds function in these particular scenarios.
Divorce and Property Settlement
During the emotionally challenging time of a divorce, quitclaim deeds can simplify property settlements. In Illinois, quit claim deeds facilitate the transfer of property ownership from one spouse to another without the need for a title search. They play an instrumental role in the division of marital assets, including the transfer of the marital home.
A court may order the party relinquishing interest in the marital home to execute a quitclaim deed. This approach enables a swift and efficient transfer and is less formal than a warranty deed. Additionally, it’s recommended that the spouse acquiring the property interest executes the quit claim deed before finalizing the divorce. This ensures compliance with the marital settlement agreement and assists in refinancing matters.
Family Transfers and Estate Planning
Family transfers and estate planning are other scenarios where quitclaim deeds shine in Illinois. They are commonly used for property transfers between close family members or trusted friends, eliminating the need for an expensive title search. When it comes to inherited property, quit claim deeds simplify the process by relinquishing ownership rights, making it easier for beneficiaries.
Quit claim deeds can also circumvent the complexity and delays of probate, a legal process to determine the validity of a will. The simplicity of a quitclaim deed facilitates estate planning by enabling straightforward property transfers.
How Can I Transfer Property Out of a Trust?
To transfer real estate out of a trust, the best type of deed is usually a Trustee’s Deed. This type of deed is for when the property is in a trust and the trustee is transferring the property to a beneficiary or to another person. By using a Trustee’s Deed the transfer shows the property is coming out of the trust and the trustee had the power to make the transfer. This provides a clear chain of title which can be important for future transactions on the property. Using a different type of deed such as a Quitclaim Deed may not be appropriate because it offers no warranties and doesn’t show the property is being transferred out of a trust. This could cause problems or questions about the trustee’s power or the validity of the transfer.
What Are the Requirements of a Valid Quitclaim Deed?
A Quitclaim Deed is required to clearly identify the grantor and grantee, the address of the property being transferred, a legal description of the property, the manner in which the grantee is taking title, a notarized signature of the grantor, and the name and address of the party that has prepared the deed. The deed may also require a grantor/grantee statement to be effective.
How Do I File an Illinois Quitclaim Deed?
Step 1: Create the Illinois Quitclaim Deed
You can do this yourself but it’s always a good idea to have a real estate attorney review it to make sure it’s correct.
The deed should have the following:
- Grantor and Grantee: The grantor is the person transferring the property and the grantee is the person receiving it.
- Property Description: This should include the legal description of the property which can be found on the existing deed or at the county recorder’s office.
- Consideration: If there’s an amount paid for the property, include it. Often a token amount like “$10” is used for transfers between family members.
- Signature of the Grantor: The person transferring the property must sign the deed.
- Notarization: The grantor’s signature must be notarized in front of a notary public.
Step 2: Get the Property’s Legal Description
- Make sure the legal description of the property is correct. This is more than just the property’s street address; it’s the specific boundaries and other identifiers that describe the property. You can find this information on the original deed, mortgage documents or at the county recorder’s office or website.
Step 3: Complete the Illinois PTAX-203 Form (Real Estate Transfer Declaration)
- In Illinois whenever you file a quitclaim deed you must also file a PTAX-203 form (Real Estate Transfer Declaration). This form tells the county about the transfer and may determine if transfer taxes are due.
- If the transfer is between family members or is a gift the transfer tax may not apply but you will still need to complete the form to declare the exemption.
Step 4: Record the Quitclaim Deed
- Once you’ve completed and notarized the deed and PTAX-203 form, you must file (or “record”) the quitclaim deed with the county recorder’s office in the county where the property is located.
- Filing Fees: There’s usually a recording fee which varies by county. Fees range from $50 to $100 but check with your local recorder’s office to confirm.
- You may also need to pay transfer taxes depending on the value and type of transfer.
Step 5: Pay Transfer Taxes (If Applicable)
- In Illinois transfer taxes may be due on the property. The amount depends on the value of the property and if any exemptions apply (for example transfers between family members may be exempt from these taxes).
- State and local transfer tax stamps may be required and must be paid before the deed can be recorded.
Step 6: Get a Certified Copy of the Recorded Deed
- Once the quitclaim deed is recorded request a certified copy of the deed for your records. This is proof the property transfer has been filed with the county.
Step 7: Inform Others
- Once the deed is recorded, inform anyone who may be affected by the transfer, such as mortgage companies, HOAs and insurance companies.
Is the Transfer of Interest Effective When the Quitclaim Deed is Signed?
The deed is recordable upon signature by the grantor, but the transfer is not effective until the Quitclaim Deed is recorded with the Recorder of Deeds for the county which the property is located in.
Can I Wait to Record My Quitclaim Deed?
Yes, you can wait to record a deed however that is a risky decision. Your interest in the property will not be recognized until the deed is recorded. It can also create a situation where you lose interest in the property due to subsequent transfers.
What Happens if Someone Records a Separate Quitclaim Deed Before I Record Mine?
If you decide to hold off on recording your deed to the property and someone records a separate effective deed you may lose your interest in the property.The grantor can only convey their ownership interest one time. Once that conveyance is recorded the grantor cannot transfer the interest again. This situation is rare but in some instances a grantor may convey their interest in multiple deeds and generally the first to record their deed will be the party that owns the interest moving forward.
What Are Alternatives to Quitclaim Deeds in Illinois?
If a quitclaim deed doesn’t seem like the right fit for your circumstances, fear not. There are viable alternatives to consider in Illinois. These include general warranty deeds, which provide full title protection, and special warranty deeds, which offer limited title protection.
Let’s discuss these alternatives further.
General Warranty Deed
A general warranty deed is a legal document used for the transfer of real estate, providing full protection against title defects. This means that the property is guaranteed to be free from any defects or encumbrances across its entire ownership history. All title-related risk is placed on the current owner who provides the warranty in a general warranty deed.
This guarantee offers a stronger protection for the buyer compared to a quitclaim deed.
Special Warranty Deed
A special warranty deed in Illinois offers a more limited warranty of title. It only covers the period during which the grantor owned the property. Special warranty deeds are commonly utilized for commercial transactions and in transfers involving multi-unit residential properties. This type of deed is often preferred when transferring property from a trustee or business to avoid the liabilities associated with issues that may have arisen before the current owner’s period of ownership.
How much does it cost to file a quitclaim deed in Illinois?
Filing a quitclaim deed in Illinois costs $150, or $160 if paid by credit card. Additionally, it is the responsibility of the individual to obtain transfer stamps and record the deed with the County Recorder.
We serve clients in Illinois, so if you’re in the Waukegan area and are looking for an experienced Waukegan real estate attorney to assist you, please feel free to reach out to O’Flaherty Law at:
33 N County St Ste 505,
Waukegan, IL
(224) 300 7607
waukegan.il@oflaherty-law.com
https://www.oflaherty-law.com/locations/waukegan
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