Q: My dad bought a house in his name only. Later, he married my aunt. They had a living trust done to leave everything to all of their children. My aunt showed me a quit claim deed my dad had signed that gave her the house.
She wasn’t sure if this was right. I told her to ask the attorney who did the living trust. She said she did and the attorney said it was OK as that the trust would supersede the quit claim deed. Is this true?
A: Generally, the answer to your question would be “No.” But, there are some exceptions. If your dad and your aunt transferred title to the home into the living trust, the living trust would and should be the owner of the property. Many people work hard and set up living trusts only to forget and transfer the property they own into the living trust.
In order for a living trust to work right, the living trust must be the owner of the property. A quit claim deed transfers any interest a person has in a property to a second person. If the person signing the quit claim deed does not own an interest in a property, the quit claim deed does not transfer anything. So, if the living trust owns your dad’s property, a quit claim deed signed after the transfer of the property to the trust should not transfer any interest in the property to your aunt.
But, if the property was never transferred into the living trust and your father signed a quit claim deed transferring title of the property to your aunt, your aunt would be the sole owner of the property today. If your aunt has that quit claim deed and it was recorded, she should be the owner of the property. If your aunt has the quit claim deed but it has not been recorded, then there is a question as to who owns the property at this time.
You would need to know whether the property was ever transferred into the name of the trust or not. If the property is still in your father’s name, the living trust won’t have anything to transfer to the children upon your father’s and aunt’s deaths. And, if that quit claim deed is recorded, the property would be in your aunt’s name and the property would transfer in accordance to her wishes in her will or as set forth by the laws in the state in which the property is located or where she dies.
It’s worth asking some more questions to find out what is going on, particularly if the attorney told her that the living trust should take care of the property. If the living trust is to take care of the property, the next question to ask is what the purpose of the quit claim deed was.
If you get your questions answered and feel comfortable, you should end up fine. If you still have questions, you might want to get a second opinion from a different estate planning attorney.