How do I perform a basic property transfer?
For small items such as everyday groceries or even larger retail purchases in shops, you usually don't have to sign any kind of separate agreement like a Bill of Sale. An informal contract is finalized when money exchanges hands and you obtain the item, with its receipt acting as confirmation. However, as the value increases, or if it is something like a car or boat where the sale gets recorded with a government agency, paperwork becomes necessary. Some states even require you to complete a Bill of Sale for these transactions.
Real estate is by far the most complicated subject matter for property transfers. Transferring real estate can often involve more steps that people expect. Commonly, transferring ownership of a home or property is done using a deed as well as a Real Estate Purchase Agreement or a Property Sale Agreement. The agreements are legal documents that represent the contract between the buyer and the seller, while the deed is what gets recorded with the state or county government. The deed to a home or piece of real estate works like the title to a car to show who owns the property.
How can I transfer property as a gift?
Another way to transfer property is as a gift. Defined as a transfer of ownership where the donor does not receive the full consideration (or payment) in return, it is governed as a distinct type of transfer from a sale. Transferring personal property can be accomplished simply through the act of giving the item to the recipient. For high value items, it can be helpful to document the gift in some way. For vehicles, completing the state title transfer document is generally required, even if there is no money being exchanged.
Usually accomplished between family members, gifts of real estate also have to be notarized or witnessed in order to be completed. Note that gifts are considered taxable under Chapter 12, Subtitle B of the Internal Revenue Code. The tax is usually paid by the donor, though in some cases that responsibility may transfer to the recipient.
Can I transfer property through relinquishment?
Though not explicitly defined, relinquishment of rights to a given piece of real estate or property can also be considered a valid form of property transfer. For example, if you and a sibling inherit property as co-owners, you may be able to relinquish your share of the property. As usual, a document in which you or another party relinquishes their rights to a given piece of real estate has to be notarized or witnessed in order to be effective.
Note that different states can and do regulate the matter differently. Always ask a lawyer to see if relinquishment is possible, and if so, what requirements you must follow.
Can I transfer property through my Will?
A Last Will and Testament can be used to transfer property after the owner's death. The full assignment of rights may depend on the beneficiary or heir accepting the Will's terms. A Will, however, cannot transfer ownership until the owner’s death. Before any property is transferred via a Will, there is a court process called probate that ensures a person’s assets and property are distributed according to their wishes. Wills and estate plans are complex, yet can prove to be important tools for helping your family and heirs understand your final wishes for your property, assets, and belongings.
Are all types of transfers subject to tax?
It is important to note that all types of property transfers are subject to taxation. To make sure you comply with tax laws and avoid unpleasant surprises, talk to a tax professional before selling or transferring property. Completing a contract or Bill of Sale for the sale or transfer can often help provide you with a record of the transaction for tax purposes.
Researching your state laws and ensuring the transfer complies with them, can also help you avoid legal problems down the road. If you have more questions about transferring property, whether it’s your old car, your home, or a prized possession, reach out to a Rocket lawyer network attorney for affordable legal advice.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
