“Can you just do a quit claim deed?”

“Can you just do a quitclaim deed?” is a common question brought to our office. Sometimes it’s a question by a child, other times by the spouse of the senior citizen homeowner. There’s a concern about “saving the house” when nursing home care is looming on the horizon. Leaving aside the complex question of whether such a transfer will disqualify the senior from receiving Medicaid benefits to pay for their nursing home care, there is still the question of who has the authority to sign the Deed. The fact that it’s a “quitclaim” type deed — as opposed to a Deed that is prepared after a thorough title search with a guarantee that the title is clear — doesn’t change the underlying fundamental of who can sign the Deed.

Of course, the Deed has to be signed by the owner of the property. If that person has advanced dementia and no longer has capacity to understand the nature and purpose of signing a Deed — even if s/he can pick up the pen and sign his or her name — such a deed might be void or voidable on the grounds of incapacity. Cases dealing with that situation go way back and New Jersey and other states have had these cases for at least a hundred years.

Is there someone who has legal authority to sign a Deed making a gift of the property? Many powers of attorney (POA’s) are limited. Some are limited to banking transactions. I had a case in which the POA did not include any real estate powers. Some POAs have broad powers but do not authorize the agent to make gifts or transfer assets. In still other cases, there is no power of attorney at all. Again, the person with dementia would need to understand the nature and purpose and effect of signing a (new) power of attorney; they have to be able to interact with the attorney who is trying to prepare legal documents for him or her.

A guardianship may be required, which is a process that can take several months even if  no one is contesting it. The Courts in New Jersey do have the power to authorize a Guardian to sign a Deed to transfer ownership of the ward’s property, provided that the  five-part “test” of the case of In re Keri is satisfied so that the best interests of the ward are protected.

So yes, we can write a “quit claim deed.” The question is — can it be signed? if so, by whom? And is it smart to do so?

Call for advice before embarking on senior care asset protection planning … 732-382-6070