This Tip Sheet advocates the use of quit claim deeds to fund trusts, remove a spouse as co-owner pursuant to divorce or dissolution of marriage, and to give away a timeshare.

A quit claim deed transfers property ‘as is.’ Quit claim deeds do not contain any implied warranties of debt outstanding or good title. An owner who ‘quit claims’ real property simply conveys whatever ownership interest he or she has along with any debt or loans secured by the property. A quit claim is the easiest and cheapest way to transfer ownership between parties who personally know each other.

Quit claim deeds can be used to give away timeshares in Hawaii. Timeshares are most often gifted to children of the owners. Other owners want to gift to nieces, nephews, other relatives or friends. Sometimes a ‘gift’ occurs when the timeshare owner sells the timeshare for nominal value.  

A quit claim deed works in gifting because little or no money is exchanged and the parties know each other. Gifting may have income tax, capital gains tax or gift tax consequences. Owners are advised to consult with a tax accountant for tax consequences of gifting a timeshare by quit claim deed.

Quit claim deeds can be used to fund trusts and avoid probate. Hawaiian timeshares not owned or titled in a trust are at risk for probate.  A timeshare must be transferred into trust while the person is still living.  A quit claim deed works to fund a trust because no real change in ownership occurs. What is changed is how title is held.

Use quit claim deeds to remove a former spouse as owner of a timeshare. A timeshare awarded to one spouse in a divorce must have the non-owning spouse removed as owner. Until the former spouse is removed from title the owning spouse cannot sell or transfer the timeshare and the former spouse will inherit the timeshare in the event of death.  Quit claim deeds work in divorce because the parties have complete information and disclosure on the value of the timeshare and amount of debt outstanding.

Posted on Dec 20, 2013

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