Legal Question in Real Estate Law in California
title change
my parents and i own a property together. they own 60% as husband and wife and i own 40% of single woman. we want to take their name off the title of property. how can we do this and will it require a reappraisal?
3 Answers from Attorneys
Re: title change
You may do it via quit claim deed. Contact me directly.
Re: title change
Sure, you can change ownership by use of a quitclaim deed, but your facts show a more fundamental issue - how to pass property from generation to generation. More often than not, the best way is by living trust, not making a gift during the lifetime(s) of the older generation. This includes using joint tenancies to pass property. These methods have undesirable tax consequences in most cases, especially where the property has appreciated since first acquired by the current owners, or may be expected to appreciate between now and the owners' passing away.
There probably wouldn't be a reappraisal for county property tax purposes in a parent-to-child transfer. However, that's not the trap. The trap is the gift tax and, in the future, the capital gains tax. We may be talking tens of thousands of dollars extra tax due to the Feds, and more to the state too, on the capital gains, which can be legally avoided through the step-up in "basis" achieved when property is acquired by inheritance under a will or trust rather than as an inter vivos gift.
As between a trust and a will, the trust has the advantage of avoiding probate as well, and the disadvantage that you'll pay a fee to have it set up. Well worth it, and I don't say this to promote my own interests; I don't do trusts or wills.
Re: title change
Sure, you can change ownership by use of a quitclaim deed, but your facts show a more fundamental issue - how to pass property from generation to generation. More often than not, the best way is by living trust, not making a gift during the lifetime(s) of the older generation. This includes using joint tenancies to pass property. These methods have undesirable tax consequences in most cases, especially where the property has appreciated since first acquired by the current owners, or may be expected to appreciate between now and the owners' passing away.
There probably wouldn't be a reappraisal for county property tax purposes in a parent-to-child transfer. However, that's not the trap. The trap is the gift tax and, in the future, the capital gains tax. We may be talking tens of thousands of dollars extra tax due to the Feds, and more to the state too, on the capital gains, which can be legally avoided through the step-up in "basis" achieved when property is acquired by inheritance under a will or trust rather than as an inter vivos gift.
As between a trust and a will, the trust has the advantage of avoiding probate as well, and the disadvantage that you'll pay a fee to have it set up. Well worth it, and I don't say this to promote my own interests; I don't do trusts or wills.
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