If you want to transfer real estate in Illinois to a relative or a friend, you might consider doing this yourself by using a quitclaim deed. A quitclaim deed in Illinois is often used to transfer property between close family members or trusted friends. It's relatively easy to prepare, although you may prefer to have an online service provider handle it for you instead.
A quitclaim deed in Illinois is easier to prepare than other deeds because the form itself is pretty simple to complete, and it doesn't require the expensive and time-consuming title search that other types of deeds usually do. However, there are other requirements that accompany filing the quitclaim deed, such as the Illinois Real Estate Transfer Declaration (described below), of which you'll need to be aware.
A quitclaim deed requires trust on the part of the person receiving the deed, because the person transferring it, also known as the grantor, isn't guaranteeing they actually own the property. With a quitclaim deed, when you're getting the property, you're only getting what the grantor actually owns. If they don't really own the property, then you'll receive nothing. And you can't sue the grantor because they're not giving any guarantees. This is why quitclaim deeds are usually used between people who know and trust each other.
Quitclaim deed in Illinois as a result of divorce
Quitclaim deeds are often used in divorces when one spouse is giving up their share of the house to the other spouse. Using a quitclaim deed makes a title search unnecessary. While granting a quitclaim deed to your ex in a divorce won't remove you from the mortgage, you can settle that issue in court, or a judge can decide who's responsible for the mortgage.
In Illinois, divorce courts suggest using quitclaim deeds because both you and your ex usually know the property's history. Using a quitclaim deed is a quick way to transfer the property.
If you're the spouse receiving the property, once you remove your ex's name and the property is transferred to you by quitclaim deed, you own all of it. You should review your prior deeds or have an attorney review them for you to help ensure there are no defects in the title. Defects can include liens, easements, and other encumbrances. If you know about them already, then there are no surprises. If you don't trust your ex, having an attorney review the title for you is a good idea to check for title defects you wouldn't know about.
One issue with using a quitclaim deed in a divorce case is that Illinois has homestead rights. In Illinois, homestead rights mean that spouses who use the property as their primary residence cannot be removed from the deed unless there's a court order or if the spouse waives their homestead rights. It's advisable to consult an attorney before you waive or otherwise lose your homestead rights.
An Illinois deed transferring property out of a trust
While individuals can use quitclaim deeds, a trustee attempting to transfer real property out of a trust to an individual cannot use a quitclaim deed in Illinois. The proper form in this case is a Trustee's Deed. The trustee uses a Trustee's Deed to transfer property to a particular person or to more than one person. The Trustee's Deed removes the real property from the trust. If you're the trustee, you'd be well advised to speak with an attorney or engage an online service provider to assist you, as the Trustee's Deed is not as easy to prepare as a quitclaim deed.
How to file a quitclaim deed in Illinois
For a property deed transfer by quitclaim in Illinois, you must use the form that's used in the county where the property is located. If the property is located in a county other than the one in which you live, call the County Recorder of Deeds in the other county to determine the proper quitclaim deed form to use.
You must fill out a quitclaim deed correctly; otherwise, nobody can transfer the property. If you feel you would benefit from using an online service provider, you can have an attorney review the deed online, prepare it, and even file it for you.
If you're preparing the quitclaim deed yourself, make sure to enter the property description just as it appears on an older deed of the property. If you can't find an old deed, check with the County Recorder of Deeds in the county where the property is located. They can tell you where to get a copy of an earlier deed.
Make sure to fill in your name and address, and the name and address of the other party involved in the transfer. Don't date or sign the deed, as you'll need to do that in a notary's presence. Write your name and address under the words, "Return Recorded Document To." You'll also need the Permanent Index Number, or PIN. If you aren't sure what that is, ask the County Recorder. Before you file the deed, get a tax stamp from the local municipality where the property is located.
When you're ready to file the deed, bring it to the County Recorder of Deeds, where they will stamp and file the deed. You'll have to pay a fee for recording, or filing, the deed. Make sure to check with the County Recorder of Deeds ahead of time so you'll know how much you have to pay and what types of payment they accept. Be sure to get copies for everyone named in the deed, including yourself.
Quitclaim deed tax implications in Illinois
Many people who use quitclaim deeds in Illinois don't have to pay transfer taxes because the property is usually a gift to a close family member or friend. As a result, there is usually no purchase price other than one dollar. If the recipient, or grantee, of the deed paid less than $100 as of 2018, the grantee is exempt from paying transfer taxes.
Usually a transfer between spouses is exempt from taxes. This isn't necessarily the case when the transfer is to the grantor's children. There could be gift taxes imposed, as well as capital gains taxes if the children want to sell the property.
You are required to file an Illinois Real Estate Transfer Declaration (Form PTAX-203) with the quitclaim deed, unless there's an exemption listed on the deed itself. Additionally, the grantor has to pay a gift tax and file a United States Gift (and Generation-Skipping Transfer) Tax Return (Form 709) if the grantee hasn't purchased the property. Certain towns, cities, and counties may require additional taxes, so check with the County Recorder of Deeds to see if you need more forms.
If you're thinking of using a quitclaim deed in Illinois, or if a court has ordered you to file one, make sure you follow these steps if you're going to file the deed yourself. Understanding how to fill out the deed, how to file it, and what tax forms to include are essential to help ensure that your quitclaim deed has been properly filed.
Find out more about Real Estate and Business