Illinois gift deed

What a gift deed does in Illinois

A gift deed transfers property with no money changing hands, and it says so on its face. Stating the donative intent matters: it supports a transfer-tax exemption in most states and it documents that the recipient paid nothing, which is exactly what a recorder, an assessor, and later the IRS will want to see. Mechanically it operates like a quitclaim. Immediate, and without title warranties.

A gift deed operates like a quitclaim deed but recites donative intent, which supports a transfer-tax exemption.

When Illinois homeowners use a gift deed

• Give a house or land to a child or grandchild
• Transfer property to a sibling or parent for no payment
• Document donative intent for a transfer-tax exemption
• Make a charitable gift of real estate

What Illinois requires on the deed

These are the execution and formatting rules county recorders enforce. Getting any of them wrong is the usual reason a deed comes back in the mail.

How to complete and record it in Illinois

1. 1Find your current deedYou need the legal description from it, word for word. If you can't find your copy, the County Recorder (or County Clerk) can provide one, usually for a few dollars.
2. 2Identify everyone by full legal nameNames must match the current deed and government ID exactly, middle names included. A mismatch creates a gap in the chain of title that shows up years later at closing.
3. 3Complete the deedDeedly builds it with Illinois's statutory language, the correct notary block, and the 3-inch first-page margin county recorders expect.
4. 4Sign in front of a notaryBring photo ID. Do not sign in advance. The signature has to be made in the notary's presence.
5. 5Complete Form PTAX-203 Real Estate Transfer DeclarationIllinois requires this alongside the deed, including for exempt transfers. Your filing packet explains which boxes apply to your situation.
6. 6Record it with the County Recorder (or County Clerk)File in the county where the property is located and pay the recording fee. Most offices in this state also accept e-recording, which is usually same-day. Keep the stamped receipt. It fixes your priority date.
7. 7Update insurance and tax recordsA change of ownership can affect your homeowner's policy, your homestead or senior exemption, and in some states the assessed value. Do this within a few weeks.

What it costs in Illinois

Illinois charges a real estate transfer tax of State $0.50 per $500, county $0.25 per $500, plus municipal transfer taxes in many cities (Chicago is substantially higher). It is customarily paid by the grantor. Cities and counties may add their own on top, so check the municipality rather than just the county.

Exemptions that commonly apply to a transfer like this: deeds where consideration is less than $100, transfers between spouses, transfers into a revocable trust, and deeds correcting a prior deed. You have to claim the exemption. The recorder won't apply it for you.

Where to record it in Illinois

Illinois deeds are recorded with the County Recorder (or County Clerk) in the county where the property sits, not where you live. There are 102 counties in Illinois.

Most Illinois recording offices accept e-recording through vendors such as Simplifile, CSC, or ePN, which is usually same-day. Check your county's website for the list it works with.

Recording offices we cover in Illinois: Cook, DuPage, Lake, Will, Kane, McHenry, Winnebago, Madison, St. Clair, Champaign, Sangamon, Peoria. See all Illinois recording offices.

What a gift deed does NOT do

Being honest about the limits is more useful than a sales pitch. Every one of these catches somebody out.

• The recipient takes your original cost basis, not the current market value. A later sale can produce a large capital-gains bill that inheriting the property would have avoided.
• A gift over the annual exclusion requires you to file IRS Form 709, even if no tax is due.
• It is irrevocable once delivered and recorded. You can't take the property back if the relationship changes.
• Gifting a property within Medicaid's look-back period can create a penalty period for long-term-care eligibility.

Quirks of Illinois law that catch people out

• Illinois calls a transfer-on-death deed a transfer on death instrument (TODI), and it uniquely requires TWO witnesses plus a notary. Ordinary Illinois deeds need only the notary.
• Municipal transfer stamps, especially in Chicago, must be purchased before recording. The county recorder will reject the deed if the city stamp is missing.
• Form PTAX-203 must accompany most deeds; exempt transfers state the exemption on the face of the deed instead.
• Illinois tenancy by the entirety is available only for a married couple's homestead.
• Leave a 3-inch by 5-inch blank block in the upper right of page one.

How to hold title in Illinois

When two or more people take title in Illinois and the deed says nothing more, the law presumes a tenancy in common, which means no automatic survivorship. If you want the survivor to take the whole property, the words have to be on the deed. Forms of co-ownership available in Illinois: tenancy by the entirety (married couples only), joint tenancy with right of survivorship, and tenancy in common.

Illinois allows tenancy by the entirety only for a married couple's homestead property (765 ILCS 1005/1c).