Legal Question in Real Estate Law in California

Re: adding names to a deed

Is the property located in Washington? If so, you need to repost this to Washington State attorneys, as California attorneys (unless licensed in both states) cannot answer this question.

If the property is in California, then the technical answer as to how you transfer title is simple, but comes with a lot of other considerations. To transfer title, you will want to prepare, or have prepared a grant deed or quitclaim deed from the current owners to the current owners plus the children. That deed then gets recorded with the Recorder's Office in the County in which the property is located. The transfer is effective as of the date and time that it is executed, but should be recorded so that it is in the chain of title.

There are a host of issues, however, with transferring title for anything less than valuable, fair market consideration. First, depending upon how much of the property you transfer, your children may be hit with a gift-tax. You can only gift a certain amount to them each year before they are subject to gift tax. Second, unless you take proper steps to exempt the transfer from reassessment, the property could be reassessed by the County Tax Assessor and the property taxes increased on the portion that is transferred. Finally, you need to make sure that the deed is properly prepared, with the correct names as grantor and grantee, legal description, etc... or the deed will not be effective.

I would strongly suggest that at a minimum, the transaction should be insured by a title company so that you have insurance in case the deed proves to be wrong. Further, you would be very well served to consult with both an attorney as well as your CPA before consummating such a transaction as it has significant legal and tax implications, and there are ways to avoid or minimize those implications through proper structuring.

Finally, how title is vested with the new ownership is extremely important and can have significant impact on your estate planning. Please consult with a local attorney.

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