Real property is funded and transferred by deed, and the choice of deed carries title-warranty, tax, creditor, and public-benefits consequences. The main instruments are the general/special warranty deed, the quitclaim deed, the transfer-on-death (beneficiary) deed, and the enhanced life estate ('Lady Bird') deed.
- General warranty deed
- Warrants clear title against all defects, even predating the grantor's ownership — the strongest buyer protection; used in arm's-length sales.
- Special (limited) warranty deed
- Warrants only against defects arising during the grantor's ownership.
- Quitclaim deed
- Conveys whatever interest the grantor has with no warranties. Common for transfers into a revocable trust or between family, but it passes any title defects and can impair title insurance — many practitioners prefer a warranty or a special 'trust transfer' deed for funding.
Practice tip
Transferring to your own revocable trust does not, by itself, forfeit the basis step-up (the property remains in your estate). Confirm the deed does not trigger reassessment; some states (e.g., California under Prop 19) have transfer/reassessment nuances even for trust and intra-family transfers.
Both let real property avoid probate while the owner keeps full lifetime control, but they are available only in certain states.
- Transfer-on-death (beneficiary) deed: names a beneficiary who takes at death; fully revocable during life; recognized in the ~30 states adopting the Uniform Real Property Transfer on Death Act or similar. The owner retains control and the beneficiary gets a step-up.
- Enhanced life estate ('Lady Bird') deed: the owner retains a life estate plus the power to sell, mortgage, or revoke without the remainderman's consent; property passes to the remainder beneficiary at death outside probate. Available in a handful of states (e.g., Florida, Texas, Michigan). Useful for Medicaid planning because it avoids a completed gift and, in those states, is not a disqualifying transfer or subject to estate recovery in the same way.
- A traditional life estate deed (without enhanced powers) makes a completed gift of the remainder, exposing it to the remainderman's creditors and removing the owner's control — usually inferior to a TOD or Lady Bird deed.
Caution
TOD and Lady Bird deeds pass property outside the trust — they can defeat a coordinated trust plan if used inconsistently. Choose one mechanism per property and integrate it with the overall dispositive scheme.
Key takeaways
- Use warranty (or a proper trust-transfer) deeds over bare quitclaims where title insurance and warranties matter.
- Funding a personal residence into your own revocable trust preserves step-up and is protected from due-on-sale by Garn-St Germain.
- TOD deeds (~30 states) and Lady Bird deeds (a few states) avoid probate with retained control and a step-up; Lady Bird deeds aid Medicaid planning.
- Coordinate deed-based transfers with the trust so they do not fragment the plan.
Authorities
- Uniform Real Property Transfer on Death Act (2009)
- 42 U.S.C. 1396p (Medicaid transfer/estate recovery); state deed statutes