How Property Can Be Transferred Without Payment — and Why Proper Legal Drafting Matters

Intro (with inbound links)

At Gentile Property Law Office, LLC, I regularly assist clients throughout Washington, DC and Maryland with deed transfers, trust funding, and property-ownership restructuring. If you need help preparing or reviewing a deed, you can learn more about my Deed Transfer Services page or explore how property fits into your overall Estate Planning solutions.

While many people think deeds only transfer property after a sale, a large portion of DC property transfers occur with no money changing hands. These are called no-consideration transfers, and they are extremely common in estate planning, family-ownership changes, and property restructuring involving LLCs or trusts.

However, just because no money is exchanged doesn’t mean the transfer is simple. Washington, DC has strict deed formatting requirements, unique tax rules, and special FP-7R exemption codes that must be used correctly. Improperly drafted or recorded deeds can result in unnecessary taxes, delays in sale or refinancing, or title issues that affect the property’s marketability.

This guide explains how no-consideration deeds work in DC, the most common uses, and why proper drafting matters.

What Is a No-Consideration Deed Transfer in Washington, DC?

A no-consideration transfer occurs when one party conveys real estate to another without a purchase price. In DC, this most commonly occurs in:

• Trust funding or reorganizing

• Transfers between spouses or domestic partners

• Transfers in connection with estate planning

• Deeds involving LLCs or revocable trusts

• Confirmatory or corrective deeds

• Transfers as part of probate administration

Despite the absence of money, DC requires that the deed accurately reflect:

• The reason for the transfer

• The correct FP-7R exemption code(s)

• The grantor’s legal authority (e.g., trustee, personal representative)

• The correct form of tenancy

• Any supporting affidavits or certifications

DC’s Office of Tax and Revenue (OTR) reviews every deed closely, so precision matters.

Common No-Consideration Deed Transfer in Washington, DC

1. Transferring Property Into or Out of a Revocable Living Trust

One of the most common no-consideration transfers is placing a home into a revocable living trust for estate-planning purposes. DC permits these transfers, but the deed must:

• Match the full trust name and date

• Properly identify the trustee

• Use the correct FP-7R exemption

• Preserve homestead and tax-class status if applicable

Errors can cause issues later—particularly when selling or refinancing—so accuracy is essential.

2. Adding or Removing a Spouse, Domestic Partner, or Family Member

In DC, residents frequently update title after:

• Marriage

• Divorce/separation

• Establishment of a domestic partnership

• Gifting property to a child or family member

Typical considerations include:

• Selecting the correct form of tenancy (TIC, JTWROS, TBE for married couples)

• Using the correct FP-7R exemption

• Ensuring survivorship rights match the estate plan

A deed that misstates tenancy or uses an incorrect exemption can create long-term problems.

3. Estate, Probate, and Confirmatory Transfers

When an owner passes away, property may transfer to:

• A surviving joint tenant

• A TOD beneficiary (after filing a confirmatory deed)

• A will beneficiary

• Heirs under DC intestacy rules

Even if the transfer involves no consideration, DC requires:

• Proof of the transferor’s legal authority

• Proper exemption codes

• References to probate filings or TOD documents

• Correct formatting that ensures marketability of title

Confirmatory deeds are also common to correct earlier drafting errors, fix a missing grantor capacity, or clarify details omitted in previous recordings.

Why DIY No-Consideration Deed Transfer Can Cause Problems in DC

Many owners attempt to prepare DC deed transfers using templates. This often leads to:

• Wrong FP-7R exemption codes → unnecessary transfer/recordation tax

• Incorrect legal descriptions

• Missing required DC-specific verbiage

• Misstatement of tenancy (a major issue in DC estate planning)

• Rejection by OTR or Recorder of Deeds

• Marketability issues later during sale or refinance

Because of DC’s strict recording practices, a deed that “looks fine” to a layperson may still raise red flags for title insurers years later.

How an Attorney Adds Value in DC a No-Consideration Deed Transfer

When I assist with a DC deed transfer, I handle:

• Reviewing the existing deed and chain of title

• Confirming ownership goals

• Ensuring FP-7R exemptions are correctly identified

• Preparing all supporting affidavits

• Drafting a deed compliant with DC format rules

• Coordinating notarization (including RON when appropriate)

• Submitting the deed and forms for OTR pre-clearance

• Coordinating final recording with the DC Recorder of Deeds

This ensures your transfer is legally compliant, properly exempted, and does not create marketability issues down the road.

External Links (Authoritative DC Resources)

DC Office of Tax and Revenue – FP-7R Exemption Codes: FP-7R Exemption Codes.

DC Recorder of Deeds – Recording Requirements: Recording Requirements.

These official resources outline DC’s deed-recording requirements and available exemptions.

Final Thoughts

No-consideration transfers are extremely common in Washington, DC, but they must be drafted and recorded carefully to avoid unexpected taxes or title issues. Whether you’re transferring property to a spouse, creating a trust, forming an LLC, or administering an estate, proper legal guidance helps protect your interests and maintain clean, marketable title.

If you are considering a no-consideration deed transfer in Washington, DC, I’m happy to review your situation and recommend the best approach.