QuitClaim vs Warranty Deed - Pls Help

[Julio Perales]

Hello all. Looking for some advice as I did not find an answer to my specific situation. My parents are wanting to transfer their paid-off home into an LLC owned by their 4 adult children, me included. This was a home that was new construction, pretty typical of Florida, national builder. When they (my folks) bought it they got a warranty deed and title insurance.

Now we are trying to decide the best way to transfer the home into the LLC. The home will be rented when in the LLC. Question:

1. Do we need a warranty deed or can we just simply use a quitclaim deed?

2. Will using a quitclaim deed make it more difficult to sell the home later?

3. I assume the Title Ins they now have will NOT transfer, but since this is their home, and we are their children, do we need to care about this?

Much appreciated in advance!

Best, ~JP

[David M.]

@Julio Perales

Generally, a quit claim deed should be suffiicent since you don't need that "warranty" that Title is clean.  Many times, the TItle Insurance will be invalidated by what you are doing.  Its generally advisable to have it, but depending on its history, sometimes one could make the argument you don't need it..  Consult a professional

Otherwise, may I ask why are doing this?  If you transfer it now, you lose the sec121 exclusion if they should ever have to sell in there lifetime, and more importantly you/they lose the stepup in basis upon death.  There are / should be far more efficient estate planning methods --- again consult a qualified professional.