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Hidden Transfers: Is It Possible To Deed Real Estate To Someone Without Them Knowing?

Today’s question is is it possible to deed real estate to someone without them knowing it?

Strictly speaking, the answer is no. Because it does not meet the acceptance “element” of a valid deed transfer. Us lawyers must learn to speak in elements because it governs everything that we do. Luckily for you dear reader, I am the Master of the Elements. And as the Avatar of laws, I can show you how to achieve the same goal with the art of hidden transfers. But before understanding the solution, we must understand the problem.

The Elements of a Valid Deed Transfer

In order for a deed transfer to be enforceable each element must be met. Or a less lawyerly way to put it would be each of the following boxes need to be checked. The deed must:

✅ Name the grantor and grantee.

✅ Be signed by the grantor. (Must also be notarized where I practice).

✅ Grantor must be legally be competent to enter contracts.

✅ Sufficient Legal Description.

✅ Recorded. (Okay, I’m stretching a bit by saying they must be recorded to be enforceable, but they really should be).

✅ Sufficient Legal Description.

❌ Accepted By The Grantee .

❎ Acceptance and Delivery Explained

Acceptance and delivery means that the grantee must acknowledge and accept the deed. I don’t think I’ve drafted a single deed in which the grantee has signed for it in my life. The grantee does not have to accept it in writing. They just have to acknowledge the gift. The only way to do this is to have actual knowledge of the gift.

Thus, a deed is transfer is invalid if the grantee does not have knowledge of it. Because one cannot acknowledge what he or she has no knowledge of.

I read case law precedent in Maryland where a husband deeded a property to his wife and she didn’t learn about it until after his death. She ended up losing a battle with the other heirs, because the deed was not acknowledged by the grantee during the grantor’s lifetime. This stuff has real repercussions.

So Master of The Elements, How Do I Transfer Property To Someone Without Them Knowing It?

By transferring the property to a proxy that holds the property for your intended beneficiary. The proxy can acknowledge the deed and accept the deed unbeknownst to your intended benefactor. Your proxy can be legally bound to use the property to meet the needs of your beneficiary. Thus we have essentially achieved the goal of conveying property to someone without them knowing it. This is the art of hidden transfers of real property.

✅ Acceptance By Grantee (proxy)

Who Can Be My Proxy?

Essentially any human or fictional entity that can acknowledge the transfer be bound by rules (more on this later). There’s a number of options to choose from:

Trust Fund Babies

Perhaps the most common example of people that are worth millions in real estate unbeknownst to them are trust fund babies. In this case the proxy could be an attorney that was appointed trustee to to manage property held in trust. And the benefactor is the trust fund baby.

How Do I Bind My Proxy And Make Him Act on Behalf of My Trust Fund Baby?

The same way you bind everyone else. Contracts baby. Whatever fancy name your contract is called depends on your proxy. But your contract sets the rules that your proxy must follow. If your proxy is a trust then you can bind you trustee with a trust agreement. If your proxy is an LLC then an operating agreement can be used. If it’s a closely held family business you an all it a family business share holder agreement. It really doesn’t matter what it’s called as long as it’s clear that your proxy is holding the property for the benefit of your grantee.

What Happens If My Proxy Doesn’t Follow My Rules?

This is a good question, because there are cases where trustees have run off with assets intended for a beneficiary. The wealthy avoid this by using reputable wealth management Firms as proxies for their trust fund babies. In the absence of this option, I’d recommend using a licensed professional such as an attorney or CPA. If a professional is not an option a family member or dear friend you can trust with your life is a good option.

But no matter who you choose, the risk is always there. If you trust no one you can always appoint yourself as your own trustee.

In the event your trustee does run off with the wealth then at the least you have a civil claim against them, and at most can press criminal charges.

Hidden Transfers – Is It Possible To Deed Real Estate To Someone Without Them Knowing It?

Technically no. But people use proxies to in essence transfer property to people without their knowledge all the time. If you are considering using hidden transfers to dispose of property located in Maryland or the District of Columbia in this manner and need to create a proxy and rules for it do not hesitate to contact us.

Brian
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Brian

Real Estate Attorney at The Pendergraft Firm LLC
Brian Pendergraft is a general real estate attorney.Click here to schedule a consultation.
Brian
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