Legal Question in Wills and Trusts in California
I just asked this question- (My parents are getting up in age and want to gift me their property in whole taking their names off and puting my name on the Grant Deed as sole owner of the property. The property is clear of any debts only yearly tax's that are current. Whats the best way to handle this?)
Now I don't understand about the possible negetive tax's on the gifting, would it be better to just buy the property for some dollar amount from my parents. I'm asking the question this way now because this isn't the time for a load of tax's on a gift.
3 Answers from Attorneys
Again, it is important for your parents to speak with an attorney about the reasons for the gift (for example: Is it for probate avoidance? Is it for Medi-Cal planning?) and if there is a better alternative than gifting the property to you. An attorney will look at your parents current financial situation and advise on the best options.
There are various tax implications, esp re: capitol gains, although there would be no gift tax payable. Your parents should definitely talk to a lawyer.
There would be taxes charged on the purchase price paid, and you would still have a gift issue for any difference between what is paid and what the property is worth. There is no good way to pass property from parent to child while the parents live unless it is an arms length purchase/sale for foll market value, and even that is rarely as good a plan as a trust. Ms. Rouse is right. You need to get to a lawyer in person and go over what the reasons are for giving you the property, and what the other financial facts are, before doing anything with the property.
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