Monopoly, deeds and automobiles

Q. My grandfather left his cabin to me years ago, and I was given a deed to the property from my aunt, who was executor of the estate. I have it safely put away. Now my cousins want to buy the cabin, and we are in agreement about everything. There isn't any mortgage on the place.

I don't see any reason why we need to have an expensive ceremony to change the ownership. Is there any reason why I can't just sign over the deed?

A. There's a common confusion here, and it comes from used cars and the game of Monopoly.

But first - even with an amicable agreement like yours, those cousins should receive some assurances before they hand over the purchase price - that property taxes are paid up to date, for example, that no one else is likely to show up with a legal claim to ownership, that you agree about the boundaries of the property.

More to the point - people often get confused about the meaning of a deed. The one you received had only one purpose - to transfer the estate's ownership of the cabin to you. A young lawyer once told me that after a deed is on file in the local public records office, it has no further use. You could safely just throw it in the wastebasket, he said.

Here's where I think the problem comes from:

Anyone who grew up playing Monopoly knows that a deed is a little square of cardboard with a colorful strip across the top. When the property is sold to another player, the card is just handed across the table. Same with the title to a car. That document is signed and given to the next owner of the vehicle.

No wonder people get confused. But that's not the way it works in real estate. The deed doesn't prove you own the property. It simply shows that the estate transferred whatever it owned to you. Legal proof of ownership would involve researching documents in the public records, listing how the estate received the property, then how your grandfather became owner, and then an unbroken chain of title as far back as the local practice calls.

When you sell the cabin, I strongly recommend following whatever procedures are common for real estate closings in the area. In a few places, including New York and New Jersey, they're usually handled by lawyers. In other states, transfers may be handled by title companies, escrow companies, lenders or even real estate brokers. In Maine and much of New England, buyer and seller pass papers. In California and 10 other states the parties go to escrow.

Everywhere, though, the same things happen. Funds due each party are calculated and exchanged. The buyer receives a new deed, with (or without) warranties, which are guarantees appropriate to the particular transaction. The deed lists the legal description of the property, not just an address, and it's signed and acknowledged by the seller. In theory, you can do all this on your own, but I think that'd be penny-wise and pound-foolish.

Q. Our home sold at foreclosure last year for $22,000 more than was owed on it. I understand the overage goes to us. We found out by accident about the excess, and we have never been notified about any money due us. Can I write a letter to them to get the excess and if so, to whom do I write and what should I say?

A. Other sums may have been subtracted from that sale price - legal expenses, for example, or past due property taxes. But with that much money involved, it's worth consulting a lawyer who can investigate and act for you.

Q. In a recent column you wrote, "The IRS says you can't deduct a loss on the sale of a second home." In fact, it is Congress (via the Internal Revenue Code) that says that. I think it is important that your readers (rather, all Americans) understand that Congress makes our tax laws - not the IRS. People blame the IRS for things that have nothing to do with the IRS.

Anyway, thank you for letting me vent a little bit. Keep up the fantastic work!

A. And thank you for the reminder. I suspect I'll go on making the same error in the future, though. It's so much simpler to say, "The IRS doesn't allow ... " Sorry about that.

• Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (include a stamped return envelope), or readers may email her through askedith.com.

© 2014, Creators Syndicate Inc.