What is the Right Deed Title for Your Deed?

I see lots of confusion from clients about deed titles. Some clients request a lady bird, then get confused when I send them a deed that doesn’t say “Lady Bird Deed” in big letters across the top. Others say that they want the owner to be responsible for title issues but also want a quitclaim deed. This article attempts to clear up this confusion by explaining the differences in terminology and deed titles.

Most Deeds are Named After Their Warranty of Title

With few exceptions, deeds are most often named after the warranty of title they provide.

• Deeds that provide a full or unlimited warranty of title (a warranty of title that covers all time periods, including the period before the grantor acquired the property) are called warranty deeds in most jurisdictions.
• Deeds that provide a warranty of title that is limited to the time that the grantor owned the property are most often called special warranty deeds, but can also go by different names. In California, they are called grant deeds; in Michigan, they are called covenant deeds; and in other states, they go by different names.
• Deeds that provide no warranty of title are called quitclaim deeds (sometimes erroneously called quick claim deeds). In a few states—including Texas and North Carolina—some title companies consider a quitclaim deed to be a release of property instead of a conveyance of property. In those states, a deed without warranty (also called a no warranty deed) may be used to transfer property without a warranty of title.

In most states, the deed will have a title at the top that reflects the warranty of title. For example, Florida deed that conveys property with no warranty of title will have the words “Quitclaim Deed” in the title. As discussed below, that is true even if the deed is also a lady bird or life estate deed.

Life Estate Deeds and Enhanced Life Estate Deeds (Lady Bird Deeds) are Secondary Titles

Calling a deed a life estate deed means that the property is being transferred in a way that divides ownership between a life tenant (who will hold a life estate for his or her lifetime) and remainder beneficiaries (who have an interest in the property that doesn’t become possessory until all life tenants have died). This designation has nothing to do with the warranty of title.

When a grantor conveys property by life estate deed, the grantor must still decide whether the grantor will be responsible for title issues. In other words, life estate deeds must specify the warranty of title. Remember the first rule above? Most deeds are named after the warranty of title. Since a life estate deed must specify the warranty of title, it is named after the warranty of title it provides.

The same principle applies to enhanced life estate deeds (commonly called lady bird deeds). An enhanced life estate deed is just a life estate deed that has been … enhanced. It includes special features that give the life tenant more control over the property, including the ability to change his or her mind. But, at its core, it is still a life estate deed and it must still specify the warranty of title. And, because it specifies a warranty of title, it is usually named after the warranty of title.

For both life estate deed and lady bird deeds, I like to include a subtitle to help the clerk (and the client) recognize that the deed has reserved either a traditional or enhanced life estate. But the deed itself will be titled after the warranty of title it provides. Here’s an example of the title to a Florida lady bird deed:

A final note on lady bird deeds: The term lady bird deed is slang. It is not a proper legal term and should not be used in legal documents (any more than you would call a BMW a beemer when transferring legal title).

It Doesn’t Matter What Your Prior Deed Was Called

Some people mistakenly believe that the deed form they are preparing must be titled exactly the same as the deed that conveyed the property to them. If the deed that conveyed the property to them says “Warranty Deed” across the top, they believe that the deed from them should also say “Warranty Deed” across the top.

While it is possible that both deeds could be warranty deeds, that would be for reasons other than the prior deed being titled “Warranty Deed.” As stated above, a warranty deed is a specific term that refers to the warranty of title. If the client wants to convey property with a full warranty of title, then a warranty deed is the right instrument. If the client doesn’t want to include a warranty of title, he or she may choose a quitclaim deed or deed without warranty. The decision depends on whether the client wants to be on the hook for title issues, not what the prior deed was called.

This problem is made worse when the prior deed was incorrectly prepared and includes an incorrect term. I had a conversation with a potential client recently who wanted his deed to say “Lady Bird Deed” across the top, because a relative of his had found a free online deed form with that written across the top. As stated above, it is never a good idea to use slang terminology in a deed. The fact that non-attorneys clutter the internet with junk deed forms doesn’t change that.

Calling a Deed a “Survivorship Deed” Creates Confusion

Sometimes clients will ask for a “survivorship deed” or a “joint tenancy with right of survivorship deed.” When a client asks for one of these deeds, they are not referring to a type of deed (strictly speaking), but to a form of co-ownership. A deed that includes a right of survivorship must also specify a warranty of title, and the deed will be named after the warranty of title.

Some state laws create confusion by using conflicting language that allows more than one title to apply to a single deed. For example, the Ohio statutes include a statutory form for a survivorship deed and different statutory forms for a warranty deed. These two titles refer to different features of the deed (the survivorship right and warranty of title, respectively), but are functionally independent. A deed could be both a survivorship deed and a warranty deed (or limited warranty deed or quitclaim deed).

In situations like this—which, thankfully, are rare—it is best practice to title the deed after the warranty of title and use the survivorship designation as a secondary title.

Sometimes we Need to Call a Deed a Gift Deed

If a deed is transferred without consideration, it is sometimes necessary to title the deed as a gift deed or deed of gift. This is done primarily for real estate transfer tax purposes in a few states, including Virginia. Calling the deed a gift deed lets the city or county officials know that the property qualifies for an exemption from transfer taxes because no money has changed hands in connection with the transfer.

Transfer-on-Death Deeds Are Their Own Thing

Transfer-on-death deeds (also called TOD deeds or TODDs) are a relatively new deed form that allows owners of real estate to transfer property at death to named beneficiaries without going through probate. TOD deeds are the most common exception to the principle that deeds are named after the warranty of title.

TOD deeds are statutorily created, and state laws differ about whether a TOD deed may include a warranty of title. But state law is fairly consistent about the importance of making it clear that a TOD deed does not take effect until death. To ensure that it is clear that the deed is a TOD deed, it is best to use the term “Transfer-on-Death” in the deed title.