She is going to buy a new home in a retirement community. Will there be financial problems associated with this if just I am on the lease or the both of us? Can the transfer be done simple and without tax?
It will be my home shortly... what is the best way to have the title in my name only?
2007-09-03 09:22:49 · 13 answers · asked by dangroner2000 3 in Business & Finance ➔ Renting & Real Estate
Consult an estate planning/elder law attorney in your area at the link below. This is actually far more complicated than it sounds. There can be estate tax, income tax, and gift tax consequences. Also, the retirement community/federal/state governments may be able to make YOU personally responsible for your mother's debts for this.
Contact a local attorney at the link below. I'm a real estate attorney. Whenever I hear this type of story, I automatically refer it to our estate planning department because it is beyond my skills. It may sound simple, but legally it is not. This is an estate planning issue that is affected by state and federal laws.
2007-09-03 16:08:55 · answer #1 · answered by mcmufin 6 · 0⤊ 0⤋
Sounds like you're saying the home your mom is buying is the home she wants to deed to you. Why don't you have papers drawn after she buys the place gifting the property to you (a life estate)? This way you avoid probate and taxes when that time comes that she passes away. The Homeowners association, if there is one, doesn't need to know what your mom's business is after she make the purchase. With a life estate, it is like you are allowing her to live in your home, and ownership reverts to you once she passes away. If there are going to be mortgage payments involved, and you are not on the loan, this doesn't take away from your ownership, but you will find that the lender will want to be paid, so you need to keep making the payments, since they don't automatically know she passed away. At the same time, you can sell or rent out the property if that is allowed in the community she buys into. (assuming you are not old enough to live there yourself) See an attorney at least for an initial free consultation so they can set you straight for any requirements in your area. Good luck, hope this helps ;)
2007-09-03 10:54:35 · answer #2 · answered by J k 3 · 0⤊ 0⤋
If mom is on the mortgage, if there is one, then NO you can not be on the title alone. Well you might be but the mortgage company still has an interest.
I totally misread your question, I think, you are asking about the home she lives in now not the retirement community home.
IF it is like a community we have here that is linked to her present home and the value is somehow figured into her retirement home fees then what you suggest would be FRAUD.
Otherwise see an Atty who can assist with the least taxes necessary on the transfer.
2007-09-03 09:30:51 · answer #3 · answered by Anonymous · 0⤊ 0⤋
The transfer can be done simply if she just wants to add you to the title. But you could be setting yourself up for capital gains taxes if you expect to sell it any time soon. If it's inherited, the basis if you sell would be it's value at the time of her passing - if she just puts you on the title or gifts the house to you while she's alive, your basis would be what she bought it for.
If you expect to live in it as your main home for at least two years, then you'd likely be exempt from capital gains tax anyway if you sell, so it wouldn't matter if she gifted it to you now.
I'd talk to a lawyer to draw up the proper transfer papers though, to be sure it's done right - it shouldn't cost much. You don't need to go to the top law firm in your area - this is routine, so any lawyer should be able to handle it easily.
2007-09-03 09:55:13 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
Why does everyone try to show how smart they are by making things complicated?
All you and your mother have to do is record a new deed. A title or land company can draw up the deed and record it for a small fee, usually a hundred dollars or so.
The title company may try to get you to purchase title insurance, but all that does is make sure that the deed is clear to you.
The title company may want you to exchange consideration to make the transfer valid, but this is nonsense, and if they insist, pay your mother $1. That is correct, one dollar.
I do not know what you mean about a lease though. I think you are confusing things.
Good Luck
2007-09-03 09:33:39 · answer #5 · answered by A_Kansan 4 · 2⤊ 0⤋
cpa's in our area say (quietly of course) that when someone goes to a retirement home or community that they sell the home for $1 to their son or daughter. I don't know about the comment you made "intends for me to own it one day" in that it seems she wants you both on the home....I don't know what to sayfor you to do right now as I don't kow if she's already bought another home, or how she or you intend for this to play out, just that I know if you both are on the home then you both would owe for it's upkeep, but I don't know if there is money still owed on it and in that case I don't think the mortgage company will change the mortgage loan. You'd best talk with your cpa and attorney. The easiest way to transfer something is via Quit Claim Deed.
2007-09-03 09:30:01 · answer #6 · answered by sophieb 7 · 1⤊ 0⤋
Please get a property lawyer to help you with this. It may cost you and your mom $500-$1000, but a lawyer will be the best one to advise you of the liabilities and benefits of being put on the deed. As another person suggested, it is true that in some instances, your mom "selling" it to you for $1 will help you avoid a "gift tax." This is what my grandmother did when she wanted me to have her house. However, you need more specific and detailed advice than what you're going to get on yahoo answers. A property lawyer can help. No offense to anyone here - just that this is kind of a big question and important venture. Good luck.
2007-09-03 09:40:02 · answer #7 · answered by SpitzFire 3 · 1⤊ 1⤋
If you take the deed the from your mother to you and your mother then you will not have any "due on transfer" penalties or tax issues in most states.
I am unsure what you mean about lease, does she own the property? or is it an agreement of deed?
2007-09-03 09:32:49 · answer #8 · answered by Etta P 4 · 0⤊ 0⤋
She should establish a family trust with you as the beneficiary that way you will get the house with an increased tax basis when she passes away. You will probably have to pay an attorney to do this. It is pretty routine and will be money well spent.
2007-09-03 09:27:46 · answer #9 · answered by Anonymous · 1⤊ 0⤋
there is a fee and paperwork to transfer the deed. It's
really not a big deal. Hopefully, you're the only child, otherwise
you could run into a sticky wicket with family relations.
2007-09-03 09:50:30 · answer #10 · answered by Anonymous · 0⤊ 0⤋