Legal Question in Real Estate Law in California
we have a house under both me and my daughter's name(50% for each one),and there has a mortgage,now i want transfer my 50% to my son, how should i do it? and is there anyway to transfer small part of it to my son every year to avoid additional tax problem for my son? Thank you very much.
2 Answers from Attorneys
You will have problems with your mortgage company if you transfer the property without refinancing and qualifying the son on the mortgage. In addition, even if you slowly transferred the property to avoid gift tax issues, you still would trigger adverse tax consequences when the property is sold. There is almost never a good reason to give real property to children while you are alive, instead of using some other method to achieve what you are trying to do. Consult with a local attorney before you do anything.
I agree. Inter-generation property transfers should be done by living trust in most cases, since this method avoids both probate and much of the capital-gains tax on an ultimate sale. Further, transfers of interests in financed property almost always trigger due-on-sale clauses or otherwise breach a loan covenant. See an estate-planning attorney.
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