I am sole owner of a single-family property in Ca. IF I die before my 1 and only brother, I want him as 100% owner of the property. I also have 1 son . I am doing a refi and my brother is helping me to qualify as such we have the vesting to be
Joint Tenancy – Must have at least two (2) owners (No Probate if owner passes away)
Joint tenancy requires two (2) or more owners and all owners must take ownership in equal percentages. An advantage of joint tenancy is avoiding the costly and time consuming probate court process in case a joint owner dies. Once a joint tenant passes, the ownership is divided equally to the surviving owner(s).
What is mention in description above is 1 reason we want to get brother "on title" vested as me and bro, single man, joint tenancy. The question is am I solving my dilema?
Next question are there any tax ramifications towards me (gifting?) to brother as I assume after refi he becomes half owner of debt of course but also half owner of the real estate value if we ever sell. Seams like uncle sam would want their hands in the pie some how some way??
Thank you for your advice
@Mark Sproesser if your only concern is after your death, then get yourself a trust, you won't have to deal with probate for the house or any of your other assets, and you won't have to play roulette with your current prop 13 status or uncle Sam, as an added bonus you'll get a healthcare directive so you can dictate who is to make your healthcare decisions if you are unable to.
I am not an attorney but I believe you are talking about "Joint Tenant with Right of Survivorship" or JTWROS. Upon your death it passed to your brother without probate, or the other way around.
I took care of my sister when she fell on hard times this way, bought a condo for her, but had her and me on the title, done as JTWROS. This transaction is separate from those of my other rentals. My wife and I agreed that if I die first, the condo will be hers. If she dies first, my wife don't care to be partners with her children, and it would rightfully be completely mine as I paid for it.
It was the purchase foreclosure sale of a condo for $40K, with lifetime gifting limits over $11 million now, so my attorney didn't bother to file any gifting paperwork as I recall. But if you anticipate your gifts to him will exceed the limit, you should report it, so there'll be a record.
I humbly ask you ignore the above options and go with a transfer on death deed like I set up for my mom in MN.
This keeps the property out of probate but also steps up the basis at death AND avoids liability issues before death. It’s also 100% revocable/changeable until owners death.
Effective January 1, 2016, there is now a new way California allows real property to be transferred upona person's death and avoid probate. ... This revocable transfer on death deed is a new simple and inexpensive way to transfer real property to a beneficiary in California.
Have you considered a revocable trust? Do you ever anticipate wanting to sell this property during life? How much equity is there currently? What do you want to happen if you should outlive your brother? And yes, you may want to look into the gift tax rules. You also may want to look at California property tax rules whether this constitutes a ‘change in ownership’ that triggers a property tax reassessment, if that is of any concern. Talking to an estate planner would likely be very beneficial to you.
*this post does not create an attorney-client or CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.
In Texas, I opted to complete the Transfer on Death Deed paperwork myself, had it notarized and filed it with the county for a nominal charge. The property will automatically transfer to the listed beneficiary upon my death, without being subject to probate process.
This was a low-cost option that I can fully control up until death. I recommend you check to determine if it is available in California, and if it meets your particular needs.
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