Understanding Quitclaim Deeds with Survivorship in Florida: What Happens When the Owner Passes?

In Florida, many people use quitclaim deeds as a simple way to transfer property ownership, especially when planning for the future. A common scenario involves adding family members to the deed to ensure the property passes smoothly without probate. For example, imagine a situation where a mother adds her 34-year-old grandson and 24-year-old granddaughter to her quitclaim deed with survivorship, listing her name first. The big question: Will the property go straight to them when she passes, with no issues?

In this post, we'll break down how quitclaim deeds with survivorship work in Florida, potential pitfalls, and why alternatives like a Lady Bird deed might be worth considering. This is based on key estate planning insights to help you make informed decisions.

What Is a Quitclaim Deed with Survivorship?

Florida offers several types of deeds for property transfer, and a quitclaim deed (often misspelled as "quick claim deed") with survivorship typically refers to a joint tenancy with rights of survivorship. This is common for non-married individuals, like a parent and grandchildren.

Here's how it operates:

• Full Ownership for All Parties: Unlike dividing the property into percentages, everyone listed on the deed— in this case, the mother, grandson, and granddaughter— holds a 100% interest in the entire property.

• Automatic Transfer on Death: If the mother passes away first, the grandson and granddaughter automatically continue owning the property as joint tenants. No probate is required, and there's no need for additional deeds or forms.

• Survivorship Progression: If another person passes, the remaining survivor(s) keep full ownership. Eventually, the last survivor owns 100% of the property outright, again without probate.

This setup sounds straightforward and is often chosen as a quick, low-cost way to avoid the probate process. But as we'll see, it's not always issue-free.

Key Requirement: Specific Language in the Deed

For the deed to function as joint tenants with rights of survivorship, it must explicitly include that phrasing. Without it, the deed defaults to a different type of ownership called tenants in common— even if multiple names are listed.

• Joint Tenants with Rights of Survivorship: All own the whole property; survivors inherit automatically without probate.

• Tenants in Common (Default if Language Is Missing): Each person owns an undivided one-third interest (in a three-person scenario). When one dies, their share must go through probate in their estate, not automatically to the others.

This mistake happens more often than you'd think. People assume adding names creates joint tenancy, but without the exact words, it becomes tenants in common. Probate for each share can lead to complications, such as:

• Additional owners inheriting portions if the deceased has heirs not on the deed.

• Disputes over living in or selling the home, especially if not everyone agrees.

Always review the deed to confirm the language. If it's missing, the property won't pass as intended.

Potential Downsides: Capital Gains Tax Implications

While a quitclaim deed with survivorship avoids probate, it can create tax issues for the heirs. By adding the grandson and granddaughter to the deed now, they inherit the mother's original tax basis— the price she paid for the home.

Let's illustrate with an example:

• Suppose the mother bought the home for $100,000 years ago.

• By the time she passes, the home is worth $500,000 due to appreciation (common in Florida real estate).

• If the grandchildren sell it for $500,000, they owe capital gains tax on the $400,000 profit (difference between original $100,000 basis and sale price).

This locks in a potentially large tax bill, doing the heirs a disservice despite good intentions.

A Better Alternative: The Lady Bird Deed

In Florida, a Lady bird deed (also known as an enhanced life estate deed) offers a smarter way to achieve similar goals without the tax drawbacks.

• How It Works: The property remains solely in the mother's name during her lifetime. The grandchildren are listed as beneficiaries who receive the property automatically upon her death— no probate needed.

• Step-Up in Basis: Beneficiaries get a "step-up" in tax basis to the property's value on the date of death. Using the same example:

  • Death value: $500,000.

  • If sold soon after for $500,000, there's no profit, so no capital gains tax.

• Additional Benefits: The mother retains full control while alive. Heirs get the sale proceeds (minus any mortgages, bills, or liens) without the tax hit.

This approach is ideal if the mother lives in the home and the grandchildren aren't residing there but plan to sell after her passing. It's a more tax-efficient way to pass property compared to simply adding names via quitclaim.

Why People Choose Quitclaim Deeds— And When to Reconsider

Many opt for quitclaim deeds as a "quicker, less expensive" estate planning tool, avoiding attorney fees or detailed discussions. The goal is often to let family sell the property easily after death without probate.

However, upfront savings can cost heirs down the road through higher taxes or ownership disputes. It's worth thinking long-term: What might seem like a simple fix could burden your loved ones.

Final Thoughts

A quitclaim deed with survivorship can indeed transfer property directly to survivors like the grandson and granddaughter without probate— if drafted correctly with the right language. But watch for pitfalls like defaulting to tenants in common or locking in an unfavorable tax basis.

For Florida residents, exploring a Lady Bird deed could provide the same probate avoidance with better tax outcomes. If you're dealing with deeds, estate planning, or property transfer questions in Florida, consulting a professional ensures everything aligns with your goals. Contact atCause Law for your Estate Planning needs. Schedule a Free consult or give us a call!