The term grantor is used in a variety of ways in many transactions, but mostly those of legal nature. In general, it’s a person transferring property in real estate or a person setting up a trust in estate planning. The grantor is the person giving something away. In other words, he/she legally transfers the property to the grantee. This could be for a house or personal assets upon passing or any other personal belongings that require legal transfer.
The grantee is the person who receives the deed and/or the transfer of property, in the case of real estate and trusts. The grantor/grantee is a legal definition by the IRS.
Can you Have Multiple Grantors?
Yes, trusts can have co-grantors. This happens most often when a married couple has joint assets that they want included in the trust. In this case, both parties would need to be grantors or co-grantors.
This is usually chosen when married couples don’t have a lot of property or investments. Splitting the property up to put into individual trusts could be time-consuming and difficult, so instead, they open a joint trust.
What Other Parties are in a Trust?
In a trust, you have the grantor and beneficiary. The beneficiary is the person or persons you leave your assets to when you die. You can have as many beneficiaries as you want. You are also in charge of who gets what – you can create the destruction and change it as needed.
Trusts also have trustees. This is the person who administers the trust upon your passing. The trustee is in charge of getting the assets to the beneficiaries. Sometimes the grantor is the same as the trustee, but they don’t have to be. If there are co-grantors, they may both be trustees, and if one spouse becomes ill or disabled, the other can handle the trustee responsibilities in his/her absence.
Other Ways Grantors are Used
You may find the term grantor in a few other transactions as well, such as:
- Grant deed – If you grant a ‘grant deed’ you promise that you are transferring property that you have not sold to any other party. You also guarantee that the property doesn’t have any liens or title issues unless they have already disclosed them. Your name as the grantor appears on the deed, and the grantee is the receiver of the deed.
- Quitclaim deed – Sometimes you need to change who is on the title to a home without refinancing. This is called a quitclaim deed. You, the grantor, grant interest in the property from yourself to the grantee or the receiver. Sometimes you even grant the property to yourself – if you recently got married but own the home in your maiden name, you deed the property from your maiden name to your married name.
- General warranty deed – As the grantor of a general warranty deed, you promise the title you transfer is free of any liens. You also promise that you have the legal right to sell the property. A general warranty deed protects the person receiving the deed as it promises there aren’t any unresolved claims on the property before the grantee took possession.
- Special warranty deed – The grantor of a special warranty deed doesn’t promise that there aren’t any liens on the property before he/she owned the property. The grantee doesn’t have the protection of a lien-free title, which means they may have issues down the road as they don’t have that guarantee.
You may also see the term grantor used when selling a vehicle (the person selling the vehicle) or when renting a piece of property (the landlord).
It’s important that the deed clearly state who the grantor and grantees are on the deed no matter if it’s a real estate deed, trust, or you are selling a car. The deed is a legal document and must include all parties.
It’s also important that all information is as clear as possible. If anyone went to court to fight ownership or the language in the deed, you want to be as protected as possible. Incorrect information wouldn’t hold up in court.
Anyone may modify a deed at any time. Make sure you have the right legal representation to make sure it’s done legally and responsibly. The last thing you want to find out is that the changes were made illegally and no longer hold up in court.