Quit Claim on inherited house?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
jimmieg
Posts: 48
Joined: Sun Feb 26, 2012 8:25 am

Quit Claim on inherited house?

Post by jimmieg » Wed Aug 08, 2018 10:16 pm

My wife's father passed and left his highly mortgaged and probably upside down house equally to his three children. My wife's sister is now living there and would like my wife and her brother to sign a quit claim.

We do not want/need the house, but want to make sure there are not financial implications or obligations for inheriting then signing off on this house?

Anybody have experience?

Thanks!

Nate79
Posts: 3025
Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: Quit Claim on inherited house?

Post by Nate79 » Wed Aug 08, 2018 10:21 pm

What does the bank say about this?

LarryAllen
Posts: 1047
Joined: Fri Apr 22, 2016 9:41 am
Location: State of Confusion

Re: Quit Claim on inherited house?

Post by LarryAllen » Wed Aug 08, 2018 10:28 pm

Does it have to go through probate? You could just assign your interest in probate and that way it will come out with a court order to sister. Or if in a trust assign your interest at the trust level to sister. If already in your name then just deed it over. Your name isn't on the mortgage. I wouldn't worry about it. Should be easy and no strings.

jimmieg
Posts: 48
Joined: Sun Feb 26, 2012 8:25 am

Re: Quit Claim on inherited house?

Post by jimmieg » Wed Aug 08, 2018 10:44 pm

Nate79 wrote:
Wed Aug 08, 2018 10:21 pm
What does the bank say about this?
Have no idea how bank will handle the mortgage as we live across the country, she is the executor. She moved into the house when he passed in 2015 and continued paying the mortgage. No probating of the will. I advised her to make things legal, which she is just getting around to. Said she has an attorney who will send a quitclaim to my wife and her brother so deed can be put into her name.

jimmieg
Posts: 48
Joined: Sun Feb 26, 2012 8:25 am

Re: Quit Claim on inherited house?

Post by jimmieg » Wed Aug 08, 2018 10:50 pm

LarryAllen wrote:
Wed Aug 08, 2018 10:28 pm
Does it have to go through probate? You could just assign your interest in probate and that way it will come out with a court order to sister. Or if in a trust assign your interest at the trust level to sister. If already in your name then just deed it over. Your name isn't on the mortgage. I wouldn't worry about it. Should be easy and no strings.
No trust. Simple will. Nothing in our name yet. The quit claim will be submitted to a judge as the only thing on the inventory. Don't know if this is a probate proceeding or not.
Is this considered an inheritance on which taxes are due though my wife, technically, will not have inherited anything?
Last edited by jimmieg on Wed Aug 08, 2018 11:16 pm, edited 1 time in total.

bsteiner
Posts: 3385
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Quit Claim on inherited house?

Post by bsteiner » Wed Aug 08, 2018 10:57 pm

Where would her share go if she disclaimed it?
jimmieg wrote:
Wed Aug 08, 2018 10:16 pm
My wife's father passed and left his highly mortgaged and probably upside down house equally to his three children. My wife's sister is now living there and would like my wife and her brother to sign a quit claim. ...
Why a quit claim deed?
LarryAllen wrote:
Wed Aug 08, 2018 10:28 pm
Does it have to go through probate? ...
You probate the Will, not the assets.
jimmieg wrote:
Wed Aug 08, 2018 10:50 pm
... The quit claim will be submitted to a judge as the only thing on the inventory. ...
Why? If she accepts the property, it's up to her what she does with it.

jimmieg
Posts: 48
Joined: Sun Feb 26, 2012 8:25 am

Re: Quit Claim on inherited house?

Post by jimmieg » Wed Aug 08, 2018 11:12 pm

bsteiner wrote:
Wed Aug 08, 2018 10:57 pm
Where would her share go if she disclaimed it?

jimmieg wrote:
Wed Aug 08, 2018 10:16 pm
My wife's father passed and left his highly mortgaged and probably upside down house equally to his three children. My wife's sister is now living there and would like my wife and her brother to sign a quit claim. ...
Why a quit claim deed?
LarryAllen wrote:
Wed Aug 08, 2018 10:28 pm
Does it have to go through probate? ...
You probate the Will, not the assets.
jimmieg wrote:
Wed Aug 08, 2018 10:50 pm
... The quit claim will be submitted to a judge as the only thing on the inventory. ...
Why? If she accepts the property, it's up to her what she does with it.
bsteiner wrote:
Wed Aug 08, 2018 10:57 pm
Where would her share go if she disclaimed it?
jimmieg wrote:
Wed Aug 08, 2018 10:16 pm
My wife's father passed and left his highly mortgaged and probably upside down house equally to his three children. My wife's sister is now living there and would like my wife and her brother to sign a quit claim. ...
Why a quit claim deed?

Don't know. We're told her attorney will send one and it will then go before a judge.
LarryAllen wrote:
Wed Aug 08, 2018 10:28 pm
Does it have to go through probate? ...
Don't know if this is probate or not. Told there are no other assets. He had an old car, old furniture, no insurance and kept re-financing house for living expenses. Our advice was disregarded. We sent a monthly check for decades to underwrite my in-laws.

You probate the Will, not the assets.
Understood, just remarking some form was prepared that showed house was only asset.
jimmieg wrote:
Wed Aug 08, 2018 10:50 pm
... The quit claim will be submitted to a judge as the only thing on the inventory. ...
Why? If she accepts the property, it's up to her what she does with it.
Great questions.

My s-i-l wants the house as she has not been a home owner in decades.

jimmieg
Posts: 48
Joined: Sun Feb 26, 2012 8:25 am

Re: Quit Claim on inherited house?

Post by jimmieg » Wed Aug 08, 2018 11:30 pm

jimmieg wrote:
Wed Aug 08, 2018 11:12 pm
bsteiner wrote:
Wed Aug 08, 2018 10:57 pm
Where would her share go if she disclaimed it?

jimmieg wrote:
Wed Aug 08, 2018 10:16 pm
My wife's father passed and left his highly mortgaged and probably upside down house equally to his three children. My wife's sister is now living there and would like my wife and her brother to sign a quit claim. ...
Why a quit claim deed?
LarryAllen wrote:
Wed Aug 08, 2018 10:28 pm
Does it have to go through probate? ...
You probate the Will, not the assets.
jimmieg wrote:
Wed Aug 08, 2018 10:50 pm
... The quit claim will be submitted to a judge as the only thing on the inventory. ...
Why? If she accepts the property, it's up to her what she does with it.
bsteiner wrote:
Wed Aug 08, 2018 10:57 pm
Where would her share go if she disclaimed it?
jimmieg wrote:
Wed Aug 08, 2018 10:16 pm
My wife's father passed and left his highly mortgaged and probably upside down house equally to his three children. My wife's sister is now living there and would like my wife and her brother to sign a quit claim. ...
Why a quit claim deed?
LarryAllen wrote:
Wed Aug 08, 2018 10:28 pm
Does it have to go through probate? ...
You probate the Will, not the assets.
jimmieg wrote:
Wed Aug 08, 2018 10:50 pm
Why? If she accepts the property, it's up to her what she does with it.

My s-i-l wants the house as she has not been a home owner in decades. We do not want the house as it is highly mortaged and we have no need.

Don't know if this is a probate process or not- but as will specifies three children are to inherit, two are being asked to sign off on their interest via a quit claim.
Have not heard from a lawyer, just told to expect paperwork, judge will sign off, property will then pass solely to s-i-l.

Lot we don't know. Maybe I would rather not know?
Just don't want it to cost us anything.

LarryAllen
Posts: 1047
Joined: Fri Apr 22, 2016 9:41 am
Location: State of Confusion

Re: Quit Claim on inherited house?

Post by LarryAllen » Thu Aug 09, 2018 8:40 am

bsteiner wrote:
Wed Aug 08, 2018 10:57 pm
LarryAllen wrote:
Wed Aug 08, 2018 10:28 pm
Does it have to go through probate? ...
You probate the Will, not the assets.
I see your point. I use the word more like a verb as in we are "probating" a decedent's assets. Since most people die intestate they don't have a will.

NotWhoYouThink
Posts: 1955
Joined: Fri Dec 26, 2014 4:19 pm

Re: Quit Claim on inherited house?

Post by NotWhoYouThink » Thu Aug 09, 2018 9:07 am

In order to quit a claim you have to have a claim. Maybe the hearing is a chance for her to disclaim. Sounds like a lot of jargon, but you need to go through the process.

After which your SIL still won't own a house, she may have a small amount of equity in a heavily mortgaged house. But I guess that will be her problem.

chevca
Posts: 1765
Joined: Wed Jul 26, 2017 11:22 am

Re: Quit Claim on inherited house?

Post by chevca » Thu Aug 09, 2018 9:34 am

Maybe this is different from state to state? But, I have been a part of the quit claim process twice in two different states and it was nothing more than one person signing a paper and sending it in. One was after a divorce and the ex quit claimed the house to me. She signed the paper, sent it in, and once it was done the house was mine (refi on the mortgage). The other I quit claimed my parents house to my sister after they passed and left it to us. Went to the county building, signed the paper, and once finalized the house was hers (sis had been living with my parents also, although house was paid off). That's all there was to it. A notary and filing fee was all there were for expenses for me.

All this talk of judges and hearings... not been my experience. Call the county where the house is located. They can probably answer some questions for you.

bsteiner
Posts: 3385
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Quit Claim on inherited house?

Post by bsteiner » Thu Aug 09, 2018 1:44 pm

NotWhoYouThink wrote:
Thu Aug 09, 2018 9:07 am
In order to quit a claim you have to have a claim. Maybe the hearing is a chance for her to disclaim. ....
It's the opposite. A warranty deed says I give you Blackacre and I own it. A quit claim deed says I give you whatever interest, if any, I may have in Blackacre, but I'm not saying I have any interest in it. A bargain and sale deed with covenants, or a special warranty deed (the terminology varies from state to state) says I give you my interest, if any, in Blackacre, and I'm saying that I didn't do anything that would adversely affect my interest, if any (in other words, I didn't sell it to someone else, I didn't mortgage it, etc., except as I disclosed).

A disclaimer by an adult and competent individual doesn't require court approval.

riverguy
Posts: 378
Joined: Sun May 23, 2010 10:33 pm

Re: Quit Claim on inherited house?

Post by riverguy » Thu Aug 09, 2018 2:22 pm

Just tell the court you disclaim the interest in the house. Court can put that in the final order and you won't need a QCD.

c1over8
Posts: 186
Joined: Fri Apr 01, 2016 10:15 am

Re: Quit Claim on inherited house?

Post by c1over8 » Thu Aug 09, 2018 2:24 pm

Looks like the IRS views a quitclaim as a gift.

https://pocketsense.com/quitclaim-deed- ... 17352.html
http://time.com/money/4659139/quitclaim-deed-taxes/

So then the question I'd be concerned about is whether the value of the of the gift is her share of the property with or without factoring in the mortgage. I don't know the answer.

Disclaimer if possible wouldn't be a gift.

adamthesmythe
Posts: 2128
Joined: Mon Sep 22, 2014 4:47 pm

Re: Quit Claim on inherited house?

Post by adamthesmythe » Thu Aug 09, 2018 2:29 pm

Seems to me it is not necessary to accept a bequest. So if you don't accept it...then you never owned it...and if you never owned it...it cannot be a gift from you to someone else.

jimmieg
Posts: 48
Joined: Sun Feb 26, 2012 8:25 am

Re: Quit Claim on inherited house?

Post by jimmieg » Fri Aug 10, 2018 7:25 am

adamthesmythe wrote:
Thu Aug 09, 2018 2:29 pm
Seems to me it is not necessary to accept a bequest. So if you don't accept it...then you never owned it...and if you never owned it...it cannot be a gift from you to someone else.
This may be where we are. Despite the perhaps the language, maybe my wife is being asked to give up any claim to the the provisions of the will, so that my s-i-l can take whatever steps necessary to work with government and mortgage holder to get title in her name.

Therefore, we never had it in the first place. No inheritance, no tax liability. We'll see what paperwork says when her lawyer sends.

Thanks to all who helped me sort this out.

RickBoglehead
Posts: 440
Joined: Wed Feb 14, 2018 9:10 am

Re: Quit Claim on inherited house?

Post by RickBoglehead » Fri Aug 10, 2018 2:33 pm

adamthesmythe wrote:
Thu Aug 09, 2018 2:29 pm
Seems to me it is not necessary to accept a bequest. So if you don't accept it...then you never owned it...and if you never owned it...it cannot be a gift from you to someone else.
This ^^^

However, there are rules that govern this also. If you decline to accept a bequest, the will may specify that it go to someone else. But that's not your wife's problem, she is not the executor.

Post Reply