Legal Question in Real Estate Law in California

Re: Avoiding certain taxes

The best thing to do is to avoid the will. Use a living trust. Upon the death of the parents the successor trustee will sign a deed on behalf of the trust to either a buyer for the real estate or to the children. In either case there will be no capital gains taxes due on the transfer. Do not transfer the property during the parent's lifetime unless more careful planning is done than you can do yourself. You can obtain a perfectly good trust package from at least one company for $400-600, all inclusive.

Let me know if I can be of further assistance.

Re: Avoiding certain taxes

What your asking is very simple to do it would cost you a normal amount by visiting an attorney who is specialized in both estate planning/real estate. You wouldn't do it by deed because that would immediately transfer property and possibly have adverse tax effects for both you and the people whom you place upon the deed. It should be done in a proper manner either through it will or trust. Trusts are not just for "rich people". They serve a specific tool in estate planning that avoids different kinds of taxes including income tax as well as estate tax. Even if you have a small estate many times it is advisable to prepare trust which shouldn't cost that much in comparison to what might cost your children to probate the estate after you pass away. Pay the lawyer now so you don't pay Uncle Sam or don't pay the lawyer and you'll have to pay he/she wore later and possibly Uncle Sam were you didn't otherwise have to. Get yourself to attorney immediately so everything is taking care of as soon as possible.i have been practicing law in this speciality for over 30 years in the san francisco bay area and if you wish to consult with me you can contact me at 925-945-6000.

Re: Avoiding certain taxes

If the kids are already named in the will, you don't need to do anything else. Upon death of both parents, the executor will probate the will and transfer the house to the children.

Placing the children on title to the house now is a big mistake. It has adverse tax consequences and also subjects the property to claims by the children(s)' creditors. In addition, the transfer is irrevocable in that if you want to take your child off title (or disinherit them), the only way it happens is either (i) if the child agrees, or (ii) through a partition lawsuit.

Finally, it would be better to transfer the house to a trust and avoid probate altogether. Probate fees run approximately 4% of the gross value of the estate (mortgages are not used as an off-set) and they are time consuming. If you want to spare your children the expense, spent $500-$2,000 to prepare a living trust and put the property in the trust.

Re: Avoiding certain taxes

There are many reasons for not putting the children's name on the deed. They should consider a trust.

Joel Selik

Attorney, Ll.M.-Tax

www.seliklaw.com

800-894-2889