Legal Question in Real Estate Law in California

Re: How can we give our kids our rental home?

Well, there are a number of issues here. There are a number of ways to handle this, depending on what your ultimate goals are, and what you have done in the past.

You say that this is a rental property, which means that you have probably taken various tax deductions, and shown income from that rental.

Is your daughter and son-in-law presently rent to you in the amount of the current mortgage or greater? The son can be left off title, and your daughter could be added, but, like I said, there could be other tax ramifications.

I would need more detail to really provide you with the best answer.

Re: How can we give our kids our rental home?

You need to be thinking in terms of a Family (Living or Inter Vivos) Trust. Don't put the home in your daughter's name. The husband may still claim a community property interest in the house even though his name isn't on the deed. Not every marriage is forever. One of the trusts that may be used is the Family Limited Partnership (a type of trust). I suggest you take the tax deduction every year, and give your daughter, and son-in-law the dollar equivalent of that as a tax exempt gift every year. You and your husband can both give $10,000.00 each every year (total $20,000.00) to your daughter, and then anyone else in the whole world that you want to give $10,000.00 to. Your daughter will not pay any taxes on that money.

Re: How can we give our kids our rental home?

One way to deal with a non-assumable mortgage is to refinance. Whether this makes sense depends upon the other terms of the present loan and the credit of the new borrower. You could talk to a lender or loan broker to find out what might be possible.

Nevertheless, I think you may be a good candidate for some comprehensive estate planning (which, by the way, I don't do). Any family with assets in the range you seem to have would be penny wise and pound foolish not to get personalized professional advice.