Not All Deeds Are Created Equal: An Estate Planning Vocabulary Tip


“Great acts are made up of small deeds.” Lao Tzu

In the legal world, the word “deed” is confusing.

Legal stamp – Conveyance

Used by itself, it usually refers to a document transferring title to real estate. There are different types of such deeds. For example, it may be a Grant Deed, a Quit Claim Deed, a Warranty Deed, or a Trust Transfer Deed.

In California, Grant Deed and Warranty Deed are essentially the same, and they signify that title is being transferred along with certain warranties about the validity of title held by the transferor.

A Quit Claim Deed, on the other hand, is a document that transfers title while limiting the warranties that the transferor makes as to the validity of title.

A Trust Transfer Deed is a document that transfers title of a property to a trust. When in the estate planning process a trust is set up, it is necessary to transfer any real estate that the planners own to the trust, and this is done by a Trust Transfer Deed.

Any or all of these documents are often confused with each other and with a Deed of Trust, which is a much different document. In California, a Deed of Trust is a mortgage. It is a document that the lender records not to transfer ownership but to provide security for a real estate loan. When the borrower is in default, the Deed of Trust gives the lender the right to foreclose on the property.

These different uses of the word “deed” are often mixed up, but the above definitions will help to avoid such confusion.

Creative Commons License photo credit: Joybot

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