Legal Question in Real Estate Law in California

I suggest a real estate attorney be consulted to prepare a grant deed to be recorded for you to the daughter.

Transferring real property to children during your lifetime is a bad idea about 97% of the time, and for a variety of reasons. Please consider the following:

1. If there is a loan on the property, there's usually a "due on sale" clause that technically makes the loan immediately due and payable upon any transfer of title doen without the lender's prior written consent. Such consent can sometimes be obtained, sometines for a fee, but a possible "due on sale" provision must be considered.

2. If you give the property, or sell it at a reduced price, your daughter will be subject to a substantial capital-gains tax when she eventually sells, because her gain will be the difference between what she acquires it for (maybe zero) and what she sells it for. On the other hand, if she inherits the property, her capital gain is the increase between the value on the date of inheritance and the date of her eventual sale (likely to be much less).

3. There might also be a gift tax issue, but not too likely. Ask your tax advisor.

4. You lose the ability to control occupancy, use, and possible future rental or sale to a third party of the property, although that doesn't appear to be a factor here, at least at present......but think ahead.

5. Prop. 13 favorable property-tax rates are sometimes lost, but with a transfer to a daughter or son your old valuation can be passed along provided you file the proper paperwork with your county assessor.

6. Finally, in rare cases property owners try to avoid creditors and claimants by transferring their property to relatives and friends. The creditors are likely to find out when the transferred asset is real property, and they have a powerful tool to get it back. See California's version of the Uniform Fraudulent Transfer Act at Civil Code sections 3934 to 3934.12.