Enhance eSignature Legitimacy for Quitclaim Deed with airSlate SignNow

How to eSign a document: eSignature legitimacy for Quitclaim Deed

hi Clint Kunz here with Anderson business advisors and I want to tell you about a certain type of deed that you should never use when you're dealing property between yourself and your business entities you know so many people out there get this wrong I hear it time and time again at our asset protection workshops one of the questions I asked during the workshop is how many people in here would use a quitclaim deed to transfer real estate into their limited liability company I'm amazed probably about 50% of the hands will go up and they will say they would use that type of D then I ask how many people have actually done it of those 50% probably half of them have used this particular type of deed now you've heard about it before a quitclaim deed it's a very popular way of describing deeding property that is if you went to a rien someone's talking about transferring real estate into an LLC or to a corporation let's say quitclaim the property well that is a huge mistake when you use a quit claim deed you are setting yourself up for potential loss in the future I'll give you an example of that I recently worked with a client who had purchased a piece of real estate about seven years ago now this individual bought this condo and after he acquired it his attorney then came back and told him you know you should create a limited liability company to put this property into and he said that's a great idea I want some asset protection so the attorney then prepared for him a quit claim deed transferring his interest into this LLC now everything's fine he's collecting the rents for the last seven years he's making money and last year he decided it's time to sell well when he sold the property he was surprised to discover that escrow held over a hundred and twenty thousand dollars on the sale of that property now I couldn't figure out why escrow was holding the money and they told him it's because there was a lien against the property from the prior seller now this lien did not get picked up on his title so he went back to his title insurers and said listen you guys missed this encumbrance on the real estate you told me the property was free and clear therefore you owe me a hundred and twenty thousand dollars title insurer looked at the property researched it and discovered that this individual had quit claimed his property into a limited liability company after he'd acquired the the condo now that was his mistake by quit claiming the property gave the title insurer and out the title insurer came back to him and said we don't have to cover you when you quit claim property you were transferring your warranty that you have no interest in the property or any interest you have you're transferring it over you make no warranty as to whether or not you have good title so when you transfer property via a quitclaim deed you will void your title insurance you should always use a warranty deed or a grant deed if you live in California you know do avoid the use of a quitclaim deed because it voids your title policy unfortunately run into far too many investors who have made this mistake using a quitclaim B just because of lack of ignorance if you're wondering when should you use a quitclaim deed well the only time I use quitclaim deeds of my practice is when there may be some person who has a potential claim against the property and you want to eliminate that potential claim so you ask them to quit claim any interest they may have over to your client that then takes them off of title altogether and removes any cloud that may be there but the quitclaim deed should never be used to transfer title between yourself and your entities or between your entities in you that should always be avoided always use a warranty deed and you'll preserve your title insurance my name is Glen Coons with Anderson business advisors be sure to check out our webinars or our seminars by going to Andersen advisors dot-com and sign up for one of our upcoming tax and asset protection workshops I look forward to seeing you there