What Are My Options For Transferring My Home To My Children?
There are several options for transferring your home to your children. One such option is to do nothing, in which case the home would likely end up going to your children. Another option would be to name them as joint owners of your home. You could also create a beneficiary deed or a transfer on death deed in order to ensure that your home goes to your children. Alternatively, you could create a will or transfer the home to a living trust.
If I Do Not Leave A Will, Who Will Get My Home?
If you do not leave a will, your home will go to your heirs. Under California law, your heirs are the people who the legislature has decided are most closely related to you, such as your spouse or children. If you have a spouse and no surviving children or grandchildren, then your home would go to your spouse. If you don’t have a spouse, then it would be divided among your surviving children and the children of any pre-deceased children. This would occur through the probate process, which will be set in motion when someone from your family or an otherwise interested party files a case with the court. The court would then oversee the distribution of your home and the payment of any debts owed by your estate.
If I Leave A Will, Does The Home Go Directly To My Children?
If you leave a will, your home will not go directly to your children; it will be transferred through the probate process. Wills are subject to the court’s authority and simply serve as a set of instructions that the court will enforce upon your death. The probate process is something we like to avoid because it’s lengthy and expensive. For example, the average probate in Los Angeles County takes about one year to process and costs eight to 10 percent of the gross value of an estate.
Can’t I Just Put The Names Of My Children On The Title Now And Avoid Probate?
Putting the names of your children on the title of your home during your lifetime would possibly allow for the probate process to be avoided; as long as your children were still alive at the time of your death and are listed as joint tenants, they would receive the home outside of the probate process. However, there are several aspects of this that would make it less beneficial to your children. First, if any of your children were to pre-decease you, then their share in the home would not go to their children but would instead be divided among your surviving children. As a result, your grandchildren from that child would be disinherited. Secondly, when the children sell the home, they would have to pay capital gains taxes based on the amount that you paid for your home. If, however, the trust transferred the home to them through a probate or living trust, then they would get a step-up in basis for capital gains taxes, meaning that they could sell the home and avoid paying taxes on the amount they received from the sale.
How Else Can I Avoid Probate?
There are two other ways in which you can avoid probate: by a transfer on death deed, and by a living trust.
What Is California’s Revocable Transfer On Death Deed?
California’s revocable transfer on death deed is a document through which a homeowner can record a deed that names one or more beneficiaries who will receive their home when they die. The effect of it is similar to a joint tenancy in that it does not go through the probate process, but the beneficiary would get the step-up in basis for capital gains. However, it still has some defects that make it less than optimal.
What Are The Pros And Cons Of California’s Revocable Transfer On Death Deed?
California’s revocable transfer on death deed is cheap to create, costing only a couple of hundred dollars. In addition, it can be done fairly quickly; all that’s required is a notarized signature from the property owner, and for it to be recorded with the county recorder. However, these types of deeds create uncertainty and might make it difficult for the beneficiaries to actually gain the title at the owner’s death.
Is There Any Other Way To Transfer Property Without Probate?
A much easier way to transfer property outside of the probate process is by placing it into the family trust, which carries with it none of the aforementioned issues. A family trust allows the owners of the property to continue to hold the property as their own for their own benefit during their lifetime, and allows for it to be transferred in accordance with their instructions upon their death. Contingencies can be placed on the trust so that if a beneficiary is deceased, the property owner can tell us how they want that beneficiary’s share to be distributed. This doesn’t create any tax issues for the beneficiaries, and it can be held for minor beneficiaries or beneficiaries who are on public benefits for disability without affecting their eligibility to receive those benefits. It also allows the property to be marketed or transferred immediately after the property owner’s death. All of the problems that arise or could arise from the transfer on death deed are avoided by putting the property into a trust, which only costs a few hundred dollars more.
Does Having A Living Trust Protect My Assets From Creditors?
It is a common misconception that having a living trust will protect assets from creditors. A living trust that is used for estate planning purposes is revocable, which means that you have full control over and access to the assets within it. Consequently, those assets are also available to your creditors for any valid debts that you have. If asset protection is a concern for you, then there are other ways to achieve a level of protection for your assets, but a living trust is not one of them.
For more information on Transferring Your Home To Your Children, a free assessment is your next best step. Get the information and legal answers you are seeking by calling (626) 385-6303 today.
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