Legal Question in Real Estate Law in California

I am divorced. I am refinancing my property. I want to add my daughter( unmarried) in the grant deed. Is Joe, a unmarried man and Doe a single woman as community property, with right of survivorship option is best? Need advice.


Asked on 7/31/12, 7:49 am

2 Answers from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

No. "Community property" is a form of holding title available ONLY to persons who are married to each other.

Also, as a matter of terminology, one doesn't add owners to a grant deed, or any other kind of deed. Owners are added to title by USE of a deed. A deed is a single-use instrument used to carry out a transfer of ownership; once executed, delivered and accepted (and hopefully recorded), its work is done and it cannot be added to or changed in any way.

Further, without knowing your reason for wanting to add your daughter to title, I cannot comment except to say that there are substantial reasons (mostly related to income taxes, e.g., the capital-gains tax) not to make a gift of real property to your expected heirs.....it is almost always much better from a wealth-preservation standpoint to let the property go via inheritance, and since trusts avoid probate, attorneys often recommend living trusts.

Finally, any co-ownership of real property can lead to two other kinds of problems: (1) Most loans contain so-called "due on sale" clauses that accelerate the due dates for full pay-off of the loan whenever the property is sold, but also may be triggered by the sale of a part interest or by a gift of the property or any present interest therein. The lender may waive the due-on-sale clause, sometimes for a fee, but don't count on it. If you want your daughter on title, do it before or as part of the refinancing, making sure the lender is aware of it, of course. Then (2), be aware that a significant portion of int-the-family co-ownerships fall upon hard times down the track, where the family owners can't agree on matters such as possession, occupancy, financing, repairs, guests, and so forth.

Some of these concerns may be inapplicable to your situation. You didn't provide many details. However, I do recommend getting both legal and tax/financial advice beforehand.

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Answered on 7/31/12, 10:17 am

Mr. Whipple is exactly right. I write only to emphasize that a gift of real property to a person you could leave it to in a living trust is 99.999% of the time a huge tax mistake. It can cost literally hundreds of thousands of dollars in unnecessary taxes when you give real property to someone while you are still alive (this also goes for any other property, but real estate is usually the only asset that people have that is worth enough to make it a big deal). Get in-person tax advice from an estate planning attorney or a really good wealth management accountant before you do ANYTHING like granting property to a child.

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Answered on 7/31/12, 4:46 pm


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