In real estate, deeds are legal documents that transfer ownership of a property from one party to another. A gift deed is a notarized legal document that freely transfers property from one party to another. Further, gift deeds provide property to someone else, without any compensation, which is why most gift deeds are frequently used between relatives and friends. The party gifting over the deed is known as the donor, and the party receiving the gift deed is often called the recipient. Additionally, gift deeds are only valid for 2 years after they are made, otherwise they are void. (NC Gen. Stat. § 47-26). Which means, if you draft a gift deed, get it signed and notarized, you have two years to record it before it becomes void.
The most common gift deeds are between a private person to another private person and there are two main questions that need to be asked and answered. First, is there title insurance on the property and are you concerned with the title insurance protection transferring. In most instances, if someone transfers title to someone else, the title insurance won’t continue, and the new owner won’t have protection under the previous title insurance. However, an exception to this is if you are just adding a person(s) to the title, the title insurance will continue. Second, are there any mortgages on the property because if there are, the concern is that the mortgage might become due and payable. Many lenders reserve the right to make mortgages due and payable if ownership changes, which is rare but can happen.
When someone is wanting a gift deed, if it is not transferring ownership or adding a spouse, it may not be necessary, however there are exceptions. For example, if a married couple took title to a property, but one of the spouses wanted to eventually change their last name and hadn’t yet, a gift deed wouldn’t be necessary because a name change doesn’t take you off the title. If you are ever in need of a gift deed, please reach out to our law firm and we can help facilitate that for you.
No Attorney-Client Relationship Created by Use of this Website:
Neither your receipt of information from this website nor your use of this website to contact The Lancaster Law Firm or one of its attorneys creates an attorney-client relationship between you and The Lancaster Law Firm. As a matter of policy, The Lancaster Law Firm does not accept a new client without first investigating for possible conflicts of interests and obtaining/sending a signed engagement letter or email correspondence. Accordingly, you should not use this website to provide confidential information about a legal matter of yours to Lancaster Law Firm.
No Legal Advice Intended:
This website includes information about current, past, and future potential legal issues and legal developments for educational purposes only. Such information is provided for informational purposes only and may not reflect the most recent legal developments. Posted information is not intended, and should not be taken, as legal advice for a particular set of circumstances you may be experiencing. You should contact an attorney for advice on specific legal problems.