Quitclaim Deed Appears To Increase Interest In Property

[paj]

Have a title question for everyone. I work in an assessor's office doing deed transfers, and have come across a situation that my office has not dealt with before. The title to the property was held by grandpa and grandma. They warranty deeded it to mom and dad with life estate, and grandsons 1 & 2 with the remainder interest. Ten years later, mom and dad do a quitclaim that has mom and dad as life tenants quitclaiming to mom and dad as husband and wife. No mention of grandsons 1 & 2. My opinion is this deed is invalid. The apparent intent by mom and dad is to have title as husband and wife with grandsons as tenants in common. The office is divided on the issue. Some say that the life tenants have ownership rights and can do as they wish, as long as they are not encroaching on the rights of the grandsons. I think that the sons are losing some rights, and mom and dad are gaining rights that they never had to begin with. Especially since they were given the life estate interest by a third party. Sure, they could try to sell or mortgage their life estate interest, but who would be stupid enough to loan money on that alone? Right?

What rights do the life tenants and remaindermen actually have in the real estate?

Any opinions or comments are appreciated. We will probably seek counsel on this, but we're all a little hazy on the issue and any possible ramifications.

[lwpat]

A quitclaim deed only transfers whatever interest, if any, you may have in the property. I have no idea what their purpose is since it just seems they are quitclaiming to themselves and the deed has no actual effect. The person with the life estate has the use of the property and any rental income. They must pay the taxes and maintenance. The remaindermen get the property in fee simple upon death of the person with the life estate.

[seniorjudge]

A quitclaim deed only transfers whatever interest, if any, you may have in the property. I have no idea what their purpose is since it just seems they are quitclaiming to themselves and the deed has no actual effect. The person with the life estate has the use of the property and any rental income. They must pay the taxes and maintenance. The remaindermen get the property in fee simple upon death of the person with the life estate.

Agreed. But I have to ask what an assessor's office is doing asking these questions? Are y'all in the title insurance business?

[paj]

Agreed. But I have to ask what an assessor's office is doing asking these questions? Are y'all in the title insurance business?

In Indiana, the assessors maintain the tax rolls, therefore we receive deeds, verify them, and determine who is actually liable for property taxes. We are the only government agency (here) that actually looks at the deed to figure out what it is trying to do.

You would think we are in the title insurance business, considering how much time I spend holding their hands so they can figure out how to do their job.

And lwpat, thanks for the comment, I also think that this deed does nothing, but I was wondering more in detail what the individual rights are for the life tenant and the remaindermen. If I were to transfer this deed and show title as mom and dad as h/w & sons all as tenants in common, then what rights would each party gain or lose in the transaction?

[seniorjudge]

And lwpat, thanks for the comment, I also think that this deed does nothing, but I was wondering more in detail what the individual rights are for the life tenant and the remaindermen. If I were to transfer this deed and show title as mom and dad as h/w & sons all as tenants in common, then what rights would each party gain or lose in the transaction?


As stated earlier, you can only convey what you have.

If you are a life tenant, all you can convey is your life tenancy. Once you pass, the interest is gone. Period. End of story. Even if.

Then the remaindermen get the place.

Most lawyers do not understand life estates; I know of some real messes created by lawyers doing deeds with life estates.

They create lots of business for title companies!

[lwpat]

I fail to see how you can transfer the deed. Only a property owner can transfer rights. You cannot make them tenants in common.

[jk]

Only a property owner can transfer rights.

wrong.

a quitclaim deed merely transfers whatever rights one has in property to whomever the rights are deeded to. I can quitclaim my rights in your house to Bozo the clown if I want. Doesn;t mean anything because I have no interest in your property but I can still do it.

additoinally, a QC deed is often used to release any rights of interest in case there may be some interest not known at the time. It clears up possible clouds on a title.

Some say that the life tenants have ownership rights

They do have ownership rights. Ownership of the life estate.

It would seem that one of two things have happened as I see it.

1. the life tenants are somehow trying to convert the life estate to a fee simple ownership, which cannot happen since all they own is a life estate, not an estate of inheritance

or;

2. the life tenants are either mistaken or misinformed concerning what the life estate is and may be trying to protect the other if one of them dies. Maybe they fear that as both having a life estate that if one dies, that half of the life estate somehow becomes an interest that may be taken over by some other or some other situation involving something of this nature.


I suspect #1.