- A quitclaim is used in the instance of a life estate when the grantor (owner of a property) wants to ensure transfer of the property after death. A quitclaim deed used for this purpose indicates the grantor will retain all rights to a property until after death, at which time the property will transfer to the grantor's heirs. This type of quitclaim might be used to alleviate any worry about who will own a property after the owner's death.
- A quitclaim is most often used when a married couple divorces and one party wants to keep the marital property (typically the home) and both names are on the deed. In this case, one party may become the grantor and give up any claim to the marital property. While this is legally binding, the grantor may not be able to use the quitclaim to be removed from the mortgage. This is up to individual mortgage companies, and in some cases, the grantee (person getting the property) will need to refinance to establish eligibility.
- An ex-spouse may use a quitclaim deed to transfer interest in a property to an ex-spouse and the ex-spouse's new spouse in the event of remarriage. This transfers financial responsibility of the property and allows it to become marital property in the new marriage, assuming the mortgage company will finance both parties in the new marriage.
- Signing a quitclaim with the intent to fraud is illegal. For instance, transferring property to someone else to avoid losing it if you're filing bankruptcy is illegal. A court can reverse a quitclaim in this instance. A seller should never offer a buyer a quitclaim in lieu of a title. This is a red flag that might indicate the title of the property is not clear.
previous post