Property deeds are legal documents that are used to convey ownership of real property. During the estate planning phase of the financial planning process, we discuss and review property deeds with our clients. To get a better understanding of what a property deed is and their importance, we sat down with attorney Michael Ruppert from Loose Law Group in Phoenix. Sun Valley Financial and Loose Law Group work closely to facilitate estate planning services for our clients. Their team is well-versed in many areas of law, including estate planning. So, without further ado, here is our Q&A with Michael:
Pablo: Michael, what exactly is the deed of a property in a primary home or rental?
Michael: Property deeds are legal documents used to show the ownership of a parcel of real property. Not only are they used to show current ownership of a parcel, but they also show the history of ownership of a parcel. More specifically, a property deed is most commonly used in the transfer of ownership of real property from a grantor (seller) to a grantee (buyer).
Pablo: What are some common misconceptions or mistakes regarding property deeds?
Michael: Executing a valid property deed requires close attention to detail. Simple mistakes, or just ignorance, can either render a deed invalid or result in unintended consequences. These unintended consequences can result in a property owner not having a complete understanding of what impacts a deed they are executing may have. Typical issues can arise, for example, when married couples learn that they owned their property as tenants in common, as opposed to tenants with the right of survivorship. This small difference can have a huge impact on what steps a surviving spouse may take when the other spouse passes away.
Pablo: Who can make changes to the deed, and why would someone want to make those changes?
Michael: The title owner can make a change on the deed to real property, and there are a number of different reasons why someone who owns property may be executing a deed. The type of deed the property owner is executing will depend on the reason for execution. For example, if the property owner is selling his/her property, they would likely be executing a warranty deed to transfer title to the seller.
Pablo: What are some pros of adding a trust or individuals to a deed?
Michael: There are a number of reasons that people may want to put their property into a trust. For example, the individual or couple may want their family to be able to inherit their home without having to go through a probate court process. Another reason for putting property into a trust is to plan for incapacity.
Pablo: What are some drawbacks of adding said trust or those individuals to a deed?
Michael: There are a number of reasons that people avoid putting their real property into a trust. Some of these reasons include additional paperwork and record keeping, which some find to be overwhelming.
Pablo: Do rental or investment properties need to have their deed reviewed and why?
Michael: When acquiring rental or investment property in Arizona, it is likely that a title company will prepare the deed for the parties involved in the transaction. It doesn’t hurt to have a trusted attorney to review the deed before completing the transaction, especially depending on the complexity of the transaction.
Pablo: What should a client consider when reviewing and making changes to their deed during the estate planning process?
Michael: There are a number of considerations that clients should be making before transferring their property. For example, if the property has a mortgage associated with it, then property owners should check the terms of the mortgage or deed of trust with their lender before making any transfers.
That does it for this week’s blog post. Thank you to Michael Ruppert at Loose Law Group for the valuable insight into such an important topic. As always, feel free to reach out to Sun Valley Financial at 602.960.0362 with any questions or concerns you may have regarding this topic. Until next time!
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