Passing Real Estate To Your Kids - How to Structure

2 Replies

My parents (aged 81 and 89) have 3 rental properties that now have sizable equity of approximately 1.5 million. While the equity gain is nice these properties have low cash flow. They'd like to move these assets into cash flowing assets like syndications and apartments to increase cash flow to benefit their children (my sister, brother and myself). What would be the best way to structure this from a tax perspective so they could pass along the cash flow to their children while they are still alive?  Appreciate any feedback.

Originally posted by @Mark Schumacher :

My parents (aged 81 and 89) have 3 rental properties that now have sizable equity of approximately 1.5 million. While the equity gain is nice these properties have low cash flow. They'd like to move these assets into cash flowing assets like syndications and apartments to increase cash flow to benefit their children (my sister, brother and myself). What would be the best way to structure this from a tax perspective so they could pass along the cash flow to their children while they are still alive?  Appreciate any feedback.

 By no means they should directly transfer the properties to the children right now. What you want can be achieved via the correct structuring of the trusts. You need to talk to an estate attorney.  This is an easy game for them. 

I didn't catch that the properties were $1.5 million so any advice I may have had would not be helpful.  I do agree that in this case, the trust is definitely the way to go.