California Real Estate Broker ExaminationTransfer of PropertyMedium
A property owner wants to transfer their real estate to their grandchild but wishes to retain control and income from the property until their death. Which of the following deed types would best accomplish this objective?
- ASpecial Warranty Deed
- BGrant Deed
- CQuitclaim Deed
- DLife Estate Deed
Show answer & explanationAnswer & explanation
Correct answer: D. Life Estate Deed
A life estate deed allows the grantor to retain a life estate (the right to possess and use the property for their lifetime), while simultaneously conveying the remainder interest to another party, in this case, their grandchild. This achieves the goal of retaining control and income until death.
Why the other options are wrong
- A. A special warranty deed warrants title only against defects arising during the grantor's ownership, and doesn't address retaining control.
- B. A grant deed conveys fee simple title with implied warranties, which would transfer immediate full ownership.
- C. A quitclaim deed transfers whatever interest the grantor has without any warranties, which doesn't fit the control objective.
Life Estate
An interest in real property that is held for the duration of the life of a designated person, after which the property reverts to the original owner or passes to a designated third party.
- Holder (life tenant) has rights of possession and income.
- Interest terminates automatically upon death of measuring life.
- Cannot be willed, but can be sold or mortgaged (interest terminates on measuring life's death).
Memory trick: Grantor wants to LIVE in it, then leave it.