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You've already gotten some good answers here, Shuchi. I'll add that the parent can put the children on the title. Check the IRS time limit for rules to avoid tax consequences.
I'd imagine it's somewhat different in different areas. I'd ask title and escrow if that's what's used in your area and also consult an attorney. Contact the Assessor's office, as there may be some kind of parent/child transfer tax benefit available.
Flower Mound, TX
Depending upon the state, the answers would vary wildly. Options include a revocable trust that the children would become the beneficiary of upon death. If there is a large amount of money then there are tax implications. Also, it is possible that transferring before death would have unintended tax consequences.
In any case, we should all have a will.
Jill Murty, Realtor - ...
Laguna Niguel, CA
I would suggest they talk with an estate attny.
Check with Attorney.
I would speak to an estate attorney.
Kathleen nailed this one!
If you are in a State that uses title companies, just have the title company do a quit claim deed if the title is clean and have them record it. Costs less than $300
Hi Shuchi -- as others have commented -- legal and financial questions should be directed to those professionals. Real estate professionals should not act outside their area of expertise.
The normal way to handle that transfer is by having an updated will with the disposition clearly updated.
Shuchi, they need a good lawyer who does primarily real estate and trust work. If they give the house to their children before they pass on, there could be disasterous capital gains consequences.
And I would never personally advise a client on this stuff other than find a great lawyer. Of course, if I was a great lawyer, I'd give them all of the legal advice they wanted!
Sounds like a legal issue and we are constantly reminded as Realtors to refrain from giving legal advice. Since state laws vary, I believe it's smart to consult a competent real estate attorney if you want to transfer a house to children.
Personally, I don't believe these kinds of activities should ever be done without appropriate legal counsel crafting the right documents. Too many issues down the line if you don't do it right.