Quitclaims and family deeds

What a quitclaim conveys

A quitclaim hands over whatever the signer has, and promises nothing about what that is.

The Florida form says the plain thing. Under Fla. Stat. 689.025¹, the grantor does remise, release, and quitclaim to the grantee all the right, title, interest, claim and demand the grantor has in the described land. It names both parties with a post office address, and it recites a sum paid by the grantee. Those are its core recitals.

What it promises is nothing beyond what the signer actually owns. Broward's property appraiser describes it as a deed that conveys the seller's interests whether or not the seller owns the property, so a grantee who takes from someone with no right acquires nothing. It is still a valid deed when correctly executed, delivered and recorded. The least formal deed Florida has, and it works.

Quitclaims have ordinary work to do. Michigan exempts from its transfer tax a quitclaim used only to confirm title already vested in the grantee, under MCL 207.526(n)², which is the deed that cleans up a flaw rather than moving anything. South Carolina exempts the same corrective or confirming quitclaim, but only so long as no consideration is paid under it, under S.C. Code 12-24-40(12)³. And Tennessee taxes a quitclaim only on the consideration actually given for it, under Tenn. Code 67-4-409(a)(1)(D)⁴. The form is a tool, and most of the time it is doing paperwork.

Family transfers and transfer tax

The tax line on a family deed can show that little or nothing was paid, and say almost nothing about what the property is worth.

Florida has no soft spot for family. A deed is subject to documentary stamp tax on its consideration, and the Department of Revenue says outright there is no specific exemption for transfers made for estate planning. A parent's gift of unencumbered property to her children, with nominal consideration on the deed, carries seventy cents of tax in the Department's own example. Seventy cents on property worth a million dollars, because the tax follows the consideration and the consideration was love and affection and a dollar.

The mortgage changes that. If the property is mortgaged, the balance at transfer is consideration, so a family deed of a mortgaged house can carry real tax with no money changing hands. The exception runs the other way for one case: a deed between spouses of homestead property, where the only consideration is the mortgage, carries no tax at all.

Other states excuse the family deed outright, and no two excuse it the same way. Oklahoma exempts deeds between spouses, parent and child, or persons related within the second degree, without actual consideration, under 68 O.S. 3202⁵. Vermont reaches further out: spouses, parent and child or a child's spouse, grandparent and grandchild or a grandchild's spouse, also without actual consideration, under 32 V.S.A. 9603(5)⁶. Kentucky exempts parent and child or grandparent and grandchild for nominal consideration, and husband and wife or former spouses in a divorce, under KRS 142.050(7)⁷. Michigan asks for nothing, exempting a conveyance to the grantor's child or grandchild, step and adopted included, under MCL 207.526(j) and (k). Maryland exempts transfers between relatives and between spouses, Connecticut deeds between spouses, and Georgia any deed of gift. Read those side by side and the point is that a tax line means different things in different states.

Where a gift is taxed at all, some states tax it on what the property would fetch rather than on the price written down. Kentucky uses the estimated open-market price for a gift, under KRS 142.050(1)(b), and Nebraska the current market value, under Neb. Rev. Stat. 76-901⁸. Florida's exemptions have their mirror in New York's statute, Tax Law 1405⁹, but the family treatment there is not settled on this page, so it says nothing about family deeds in New York.

A lead, not a finding

A quitclaim to a relative the month after you sued is a lead. It is not proof.

A relative is an insider. For an individual debtor, a transfer to an insider is one of the factors a court may weigh in deciding actual intent, under Fla. Stat. 726.105¹⁰ and DCL 273(b)¹¹. A relative here means someone related within the third degree by blood, a spouse, or someone related to a spouse within the third degree, under Fla. Stat. 726.102(13)¹² and DCL 270(n)¹³. That definition turns on degree, so whether a given relative counts depends on the family tree, not on the word on the deed.

Two more factors sit alongside the insider one. A transfer made after the debtor was sued or threatened with suit is a factor, and a transfer for less than reasonably equivalent value is a factor. Insider, lawsuit first, nothing paid: three things a court may consider among others, and still not a finding. In New York the creditor proves the claim by a preponderance of the evidence, under DCL 273(c), so the factors point rather than decide. Florida's statute on deeds between spouses says the matching thing from its own side, that it does not validate a deed made to defraud a creditor or avoid a legal debt, under Fla. Stat. 689.11(3)¹⁴.

There are innocent readings the law itself recognizes. Several transfer tax statutes exempt deeds between spouses in a divorce, which is a transfer the land records will show and a creditor might misread. Estate planning, adding a spouse to title, clearing up an old name, repairing a flaw: the everyday reasons people sign quitclaims to family. And a relative who took in good faith and for reasonably equivalent value is protected against an actual-intent claim, under Fla. Stat. 726.109(1)¹⁵ and DCL 277(a)¹⁶. Good faith plus fair value is a defense, not a suspicion.

The record will not sort this out for you. Broward's appraiser will show the relative as owner once the deed is recorded, and it states that it has no legal authority to determine whether a deed is fraudulent. The window to act is the ordinary one: four years from the transfer, or one year from when it could reasonably have been discovered if later, in Florida and New York, under Fla. Stat. 726.110(1)¹⁷ and DCL 278(a)¹⁸. For what a deed can and cannot carry on its face, see badges of fraud you can read off the record, and for timing against the judgment, transfers after a judgment. Then you are left weighing the dates on your own debtor's deed, which is yours to do.