Deed of Gift Virginia: Everything You Need to Know
Gift deeds and quitclaim deeds are the most frequently used kind of deeds when a property is given as a gift.3 min read
2. What is a Quitclaim Deed?
3. What is a Warranty Deed?
What is a deed of gift in Virginia? A deed is a written document that is used to transfer ownership of a property from one party to another. Gift deeds and quitclaim deeds are the most frequently used kind of deeds when a property is given as a gift. Typically, gift deeds and quitclaim deeds are used for different purposes, however, there are some situations that allow the possibility of using either one, albeit with very different tax consequences.
What is a Deed of Gift?
A deed of gift, or a gift deed, is a legal document that transfers a title to real property from one party (the grantor/donor) to another (the grantee/donee). Usually, a gift deed is used to voluntarily transfer property between family members or close friends. They can also be utilized to donate the property to a charity or nonprofit organization.
A deed of gift must be signed by all parties, notarized by a Virginia notary, and witnessed by two or more parties who have no ownership interest in the property. The deed must be submitted to the recorder's office in the county of Virginia where the property exists. The deed proves that the transfer is actually a gift and does not require any conditions or form of compensation.
For a gift deed to be legally valid, it must meet the necessary requirements:
- The grantor intends to make a gift of the property
- The grantor must deliver the property to the grantee
- The grantee must accept the gift.
- The deed must contain wording that clearly states no consideration is expected or necessary (as any unclarity or phrasing associated with consideration could make the deed legally up for contest)
- Grantor's full name and marital status
- Grantee's full name, marital status, mailing address, and vesting
An agreement to transfer ownership sometime down the road is not a gift. If a deed doesn't immediately transfer the property or meet any of the necessary requirements, it can be revoked. Vesting is the type of title holding by the grantee. Virginia legally acknowledges tenancy in common, joint tenancy, and tenancy by entirety as types of ownership.
What is a Quitclaim Deed?
A quitclaim deed, sometimes known as a "dead of release," is a legal document utilized when an individual would like to give up interest or ownership in a personal or real property. It is utilized to transfer jointly owned property to one of the owners. When divorcing couples or family members transfer properties between each other without payment, a quitclaim deed is commonly used. Each owner must sign the quitclaim deed and then the document must be notarized.
A quitclaim deed does not mean any existing financial obligations or debt (such as tax liens or mortgage agreement) have been relieved from the grantor. In addition, if another party also owns the property, the quitclaim deed only revokes the ownership rights of the grantor. Thus, if there are more than two parties involved, all other valid owners still have interest and claim on the property. The grantee and grantee's heirs are assigned in fee all the legal or equitable rights the grantor has at the time of conveyance.
Unlike a gift deed, a quitclaim deed allows the grantor to relieve ownership rights for either no compensation or may choose to receive compensation from the grantee. The quitclaim deed must note the received payment, and this payment will be taxed to the grantor. Quitclaim deeds do not allow the transfer of ownership of any possessions on the property.
What is a Warranty Deed?
A warranty deed may also be utilized in the transference of property. If a deed is meant to be a warranty deed, it should contain the appropriate legal phrasing to designate it as such, for example, the term "conveys and warrants." This means the grantor (giver) is making several warranties to the grantee (recipient). Examples of warranties may be:
- The grantor is the lawful owner of the property at the time of delivery and that grantor has the right to convey the property.
- The property is free from all liens or encumbrances.
- The grantor will defend the title so that the grantee may reasonably enjoy possession of the property with the power to convey it if desired.
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