Legal Question in Wills and Trusts in California

Your parents should probably speak to an Estate planning attorney and their tax accountant.

Adding you to a Deed today may create gift tax issues and also may increase your tax liability when you sell the property if you lose the right to claim what is called a stepped up basis in the property that you would receive if you were to inherit the property. If the purpose for your parents is to use this as an Estate planning device, there are better choices available, such as a revocable trust, that they should consider.

In 99% of situations it should not be done at all. Adding children to title to property while you are living has serious adverse tax results. The parents become liable for gift tax on the equity, and the children lose the benefit of the stepped up basis when the parents pass away. It can cost hundreds of thousands of dollars in unnecessary taxes. An intervivos trust is almost invariably a far better soluton.

I agree with the above attorneys. If this is done for estate planning purposes, then better options are available -- even wills without a trust may be appropriate. Your parents should go to an estate planning attorney in their community to discuss better alternatives.

But to answer your question, a grant deed can be used to transfer a partial ownership interest to real property.

Sincerely,

Kai H. Wessels, Esq.