Transferring a house to children question

[genchan]

I'm not sure if anyone here will be able to answer this, but I thought I'd ask. My parents have most of their money tied up in their house. They have plenty of cash for their retirement, but want to begin giving us (their kids) the value of the house. In this situation, what is the best way to have the house transferred over without implementing lots of taxes?

[Snoopy2645]

Re: Transferring a house to children question

Well I know my grandma did it I think maybe a quick deed title transfer not sure I will find out though but I think that sounds right I know my uncle paid no taxes when they did it because it was transfered to my uncles name.

[sweeps]

Re: Transferring a house to children question

One possibility is a Qualified Personal Residence Trust.

[VJW]

Re: Transferring a house to children question

Be careful with asset transfers. If the transfer of the real estate is at a below market value, it can be considered a gift, and will be deducted from your parents lifetime Gift Tax Exemption.

That can be perfectly OK, as long as they don’t require the entire exemption.

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[Gailete]

Re: Transferring a house to children question

I'm not sure if anyone here will be able to answer this, but I thought I'd ask. My parents have most of their money tied up in their house. They have plenty of cash for their retirement, but want to begin giving us (their kids) the value of the house. In this situation, what is the best way to have the house transferred over without implementing lots of taxes?

They need to talk with a lawyer about this. If they end up needing nursing home care and have to apply for welfare to help pay the costs, there are certain ramifications if they have given their assets away in a certain time frame. It can be quite a mess and taxes won't be the biggest problem.

Gail

[jodi]

Re: Transferring a house to children question

First of all, let me explain that I am NO expert here...just relating my experience. Definitely consult an attorney so you can be aware of all the ramifications of any action.
My grandmother put her house into my mom and aunt's name several years before she passed away. When my mom and aunt sold the house after her death, they had to pay capital gains taxes because they had not lived in the house. Because my grandmother paid so little for the house 50 years ago and sold it for a much, much higher price in a good market, the taxes were not insignificant. Just something to think about.
My parents have put their house, farm, and assets into a trust for us children. This way, it cannot be taken from them if they need nursing care (so long as the waiting period is up - I think they can look back 5 or 6 years for transfers of property), but they will be assured life use. There is a certain term for this trust (irrevocable, I believe), but a good lawyer can help you through the process. However, it's not cheap.