Legal Question in Wills and Trusts in California
Hello and thank you for any advice!
I have been divorced just over a year and have only one child, a son. I have been changing the beneficiary on my life insurance policies and retirement accounts over to my son (college student, age 21).
Q #1
Do I understand correctly that "POD" bank accounts go directly to the second person named on the account (without taxes, right?)?
Can I have my son named as POD on my retirement accounts too?
Q #2
I very recently purchased a small house, and want to leave that to my son as well. (He will also 'inherit' the mortgage loan/payment)
Is there a way to put my sons name onto the title deed - so that when I die (probably not soon) - the house will go to him *without increasing the property value and property taxes?
My goal is for him to inherit house - with little (or no) mortgage payment.
I am considering (Joint Tenants?).. My son is very responsible, ethical and conscientious.
Thank you for any information.
1 Answer from Attorneys
The general position of almost all attorneys is that you should not put a chlld on title. He may be wonderful now, but what if he marries a woman who is not, ther s some major breach in your relationship, etc. As a joint tenant he can demand that you sell the house and give him half the profits; if you do not, he can force a sale through a partition lawsuit. When you die, only one half of the house gets a stepped up basis. If you sell the house, only half of the $250,000 tax exemption applies. Parent to child transfer can avoid increased property taxes by filing for an exemption. Technically you are giving him a gift and it should be reported on your income tax form; I suspect almost no one does that.
The same general response applies to your bank account. It is not tax free; if one could avoid taxes in that fashion, no one would end up paying any tax on their savings.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
