People in Connecticut who want to transfer their homes to heirs have sometimes in the past made use of an unrecorded deed. The grantor signs the deed and gives it to the intended person, not to be recorded until after the death of the grantor. It may have been a useful estate planning device, but with the advent of transfer-on-death deeds, it makes little sense to use an unrecorded deed in most cases.
Among the potential problems with an unrecorded deed are that the document may be lost or the property encumbered prior to recording. If a signed deed is lost, misplaced or stolen prior to recording, it can cause expensive problems and confusion for the people involved. If the grantor has creditors, they may seek to attach the property in pursuit of a debt, and the recipient of the unrecorded deed may not be able to secure a clear title.
For purposes of gift taxation, the gift is not complete until the deed is recorded. The grantor continues as the owner of the property, and he or she can sell the property to someone else or borrow money against it.
By making use of a transfer-on-death deed, a person may keep title to the property during life without restrictions, and the property will transfer to the beneficiary after death. If the goal is to avoid probate and transfer title after death, the transfer-on-death deed may work.
A lawyer may be able to help people with estate planning. Using a will, trusts, powers of attorney and other planning devices, a lawyer might develop a comprehensive estate plan to meet the needs and goals of the client. A lawyer may examine the facts of the client’s situation and suggest options to reduce tax liability or avoid probate for heirs.
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