To transfer a property title to a family member, you choose the type of deed that fits what you’re trying to accomplish, draft it with the correct legal description, sign it in front of a notary (and witnesses, if your state requires them), and record it with the county recorder where the property sits. The paperwork is the easy part. The parts that catch families off guard are the gift tax filing, the capital gains basis the recipient inherits, the Medicaid look-back if long-term care is on the horizon, and the mortgage clause that may or may not survive the transfer.
Pick the Deed That Fits Your Goal
The deed you use decides how much protection the new owner gets and whether the transfer happens now or at your death.
Quitclaim Deed
A quitclaim deed is the workhorse for family transfers. It passes whatever interest the signer has in the property and makes no promises that the title is clean or that the signer owns anything at all.1Legal Information Institute (LII). Quitclaim Deed That’s fine when you trust the other person and know the property’s history, which is why quitclaims show up constantly between spouses, parents and children, and siblings.
One side effect worth knowing: a quitclaim typically voids any existing owner’s title insurance policy because those policies tie coverage to the prior owner’s warranty liability, and a quitclaim carries no warranties. If the new owner wants title insurance, they’ll need to buy a fresh policy.
Warranty Deed
A warranty deed is the opposite. The grantor guarantees clear title, the legal right to transfer, and a duty to defend against future claims. If a title defect surfaces later, the signer is on the hook to fix it.1Legal Information Institute (LII). Quitclaim Deed A title search is usually run first to confirm the chain is clean. Warranty deeds are less common in pure family gifts but make sense when real money changes hands or the recipient plans to get a mortgage later.
Life Estate Deed
A life estate deed splits ownership across time. You keep the right to live in and use the property for the rest of your life; when you die, full ownership passes automatically to whoever you named as the remainderman, without probate. Useful for a parent who wants to stay put but ensure a child inherits. The tradeoff: once signed, you can’t sell or mortgage without the remainderman’s consent.
Transfer-on-Death Deed
A transfer-on-death deed names a beneficiary who receives the property when you die, similar to a payable-on-death designation on a bank account. You keep full control during your lifetime and can revoke or change the beneficiary. The property skips probate. Roughly 30 states and the District of Columbia recognize these deeds. If yours doesn’t, a life estate deed or a revocable trust can do similar work.
Draft and Sign It Correctly
Every valid deed needs the full names of the grantor and grantee, language showing the intent to transfer ownership, and a legal description of the property.2Legal Information Institute (LII). Deed The legal description is not the street address. It’s the formal description using lot numbers, metes and bounds, or other survey language that matches county records. You can pull it from your existing deed or from the county recorder. Getting it wrong is one of the easiest ways to invalidate the transfer.
The grantor signs, and in most states the signature must be notarized. Some states also require one or two witnesses. Notary fees for a standard deed signature generally run from a few dollars to around $15 per signature, more for remote online notarization. Miss a witness or a notary stamp and the deed may be unrecordable or legally invalid.
Deal With the Mortgage Before You Transfer
If a mortgage is still attached, you can’t just deed the property away and walk off. Most mortgages contain a due-on-sale clause letting the lender demand full repayment when ownership changes.3Legal Information Institute (LII). Due-on-Sale Clause Trigger it without planning and the family can face a forced sale.
Federal law provides a sizable safety net that many families don’t know about. The Garn-St. Germain Act bars lenders from enforcing a due-on-sale clause for several common family transfers on residential properties with fewer than five units. A lender cannot call the loan when:4Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions
- The property transfers to the borrower’s spouse or children.
- A relative receives the property after the borrower dies.
- A spouse receives the property under a divorce decree or separation agreement.
- The borrower moves the property into a revocable living trust and remains a beneficiary, with occupancy rights unchanged.
- A joint tenant dies and their interest passes to the surviving joint tenant by operation of law.
These protections cover most parent-to-child and spouse-to-spouse transfers, but they don’t erase the debt. The mortgage still exists and still has to be paid. The original borrower generally remains personally liable unless the lender agrees to a formal assumption or release.
Beyond the mortgage, check for tax liens, contractor liens, and judgment liens before transferring. Any lien on the property follows the title to the new owner. A pre-transfer title search will surface them. Pay them off before signing, or decide in writing who takes responsibility.
Record the Deed With the County
A signed and notarized deed isn’t fully effective until it’s recorded with the county recorder or register of deeds where the property sits. Recording puts the world on legal notice that ownership has changed. Skip it and the new owner’s claim is vulnerable to competing interests.
Recording fees vary by county, typically from about $25 to over $100 depending on the jurisdiction and page count. Many states also charge a transfer tax or documentary stamp tax at recording. About 34 states charge some form of transfer tax, with rates generally running from 0.1% to around 2.5% of the property’s value, though many jurisdictions exempt transfers between immediate family members or transfers for no consideration. Some counties also require a preliminary change of ownership report alongside the deed so the assessor can decide whether to reassess. Check with the recorder before you file.
The Tax Consequences People Don’t See Coming
When you give property to a family member for less than fair market value, the IRS treats it as a gift. That doesn’t automatically mean tax, but it does mean paperwork, and the bigger issue often shows up years later when the recipient sells.
Gift Tax Filing
For 2026, you can give up to $19,000 per recipient with no gift tax consequences.5Internal Revenue Service. Frequently Asked Questions on Gift Taxes Married couples who elect to split gifts can double that to $38,000 per recipient. Almost any real estate gift will blow past the annual exclusion.
Exceeding it doesn’t mean writing a check to the IRS. The excess reduces your lifetime gift and estate tax exemption, which is $15,000,000 per individual for 2026 under the One, Big, Beautiful Bill.6Internal Revenue Service. What’s New – Estate and Gift Tax Most people never use that full amount. But you must file IRS Form 709 for any year your gifts to a single person exceed the annual exclusion, even if no tax is due. The deadline is April 15 of the following year.7Internal Revenue Service. Instructions for Form 709 (2025)
The Cost Basis Trap
This is where lifetime gifts of real estate get expensive. When you gift property, the recipient takes your original cost basis, which is what you paid plus improvements.8Office of the Law Revision Counsel. 26 USC 1015 – Basis of Property Acquired by Gifts and Transfers in Trust Buy a house for $80,000 thirty years ago, gift it to your child when it’s worth $400,000, and your child’s basis is still $80,000. Sell at $400,000 and they owe capital gains tax on $320,000 of profit.
Inherited property is different. It gets a stepped-up basis equal to the fair market value on the date of death.9Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent In the same scenario, the child’s basis jumps to $400,000, and selling immediately produces zero capital gain. If the family member is likely to sell the property eventually, transferring at death rather than during your lifetime is usually the cheaper tax outcome by a wide margin.
Property Tax Reassessment
In many jurisdictions, a change in ownership triggers a reassessment of the property’s value. If the property has appreciated since the last assessment, the new owner can see a sharp jump in annual property taxes. Some states offer partial exemptions for parent-child or spousal transfers, often conditioned on the recipient using the property as a primary residence. Call your local assessor before transferring to find out whether an exemption applies and what form has to be filed alongside the deed.
Don’t Gift the House If Medicaid Is on the Horizon
A property gift can backfire badly if you or your spouse later need Medicaid for nursing home care. Federal law imposes a 60-month look-back: when you apply for Medicaid long-term care benefits, the state reviews every asset transfer you made during the five years before your application.10Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets Any transfer for less than fair market value in that window — gifting a house to your child counts — creates a penalty period during which Medicaid won’t pay for your nursing home stay.
The penalty length equals the uncompensated value of the transferred asset divided by the average monthly cost of nursing home care in your state. The clock doesn’t start until you’ve entered a facility and applied for Medicaid, which is what makes it so punishing. You can’t wait it out at home.
There are narrow exceptions. You can transfer your home to an adult child who lived with you and provided care that delayed your need for institutional care for at least two years before you entered a facility. Transfers to a spouse, to a blind or disabled child, or to a sibling with an equity interest who lived in the home for at least a year before institutionalization are also exempt.10Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets The state will scrutinize any claim to an exemption closely. If long-term care planning is on your mind, talk to an elder law attorney well before the five-year window matters.
After Recording
Once the deed is recorded, the new owner should call the homeowners insurance carrier immediately. If the name on the policy doesn’t match the name on the deed, claims can be delayed or denied. The new owner needs to be added to the existing policy or get a new one. For a transfer into a trust, send the carrier a certificate of trust showing the trust’s legal name and the trustee.
Order a certified copy of the recorded deed from the county recorder. That’s the new owner’s proof of ownership and will be needed for refinancing, selling, or any future transaction. Run a follow-up title search a few weeks later to confirm the deed was indexed correctly and that no new liens appeared during the transfer. Indexing mistakes happen more often than you’d think, and catching one early is easier than untangling it years down the line.