for inheritance purposes is it a good idea to divide ownership of home between ourselves and our three grown up children? would we be required to sell our home if they had a claim on them?
There are eight ways to take title, six of them allow for co-ownership:
1) Community Property;
2) Joint tenancy;
3) Tenancy in Common;
4) Tenancy in Partnership;
5) Title Holding Trust
6) Community Property Right of Survivorship.
For the pros and cons of each and an independent analysis, here is an excellent report from Chicago Title Company that should answer your questions. Enjoy:
I belive It is bad idea to give your stuff away while you are still alive. There are huge tax saveing to getting property as part of an inheritance versus a gift. Your family will probably get your property tax free as part of an inheritance vs you paying taxes on your gift. Also, yes if anyone else is co-owner and they have a judgement it can attach to the property. Plua, I have seen where the children and the parents no longer speak to each other because the parents situation changed and they wanted to sell the house, but the children would not sign off on the deed.
Spend the couple of hundred to talk to an estate attorney. It will save you thousands and have a better chance of keeping your family together while you are alive and after you have passed.
Chris makes a couple of excellent points. The trust will shield the property from liens and encumbrances and the property itself will pass through probate to the kids upon death.
Since the interest of the beneficiaries under a land trust is personal property, and since the trust agreement expressly precludes the vesting of any legal or equitable right in a beneficiary, partition is not available.
Henry W. Kenoe, Keno on Land Trust, IICLE, p 3-012 Sec. 3-9 (1989)
CA. Civ. Code §872.210
CA Probate Code §50
CA. Probate Code §133(i)(c)
CA. Civil Code §955.1
Wile, “Judicial Assistance in the Administration of California Trusts,” 1`4 Stan. L.Rev. 231, 245-250 (1962)
CA. Estate Administration, §§33.11 to 33.35 (Cont. Ed. of the Bar, 1959)
Aronson v. Olsen, 348 Ill. 26, 29, 180 N.E. 565, 566 (1932); Breen v. Breen, 411 Ill. 206, 210-12, (1952).
Probate Code §§11600 et. seq. & 2463;
You need a lawyer, yes but you also need to visit the District Attorney. Best bet is to hire a former DA practicing law and have him vist the DA with you.
You and any other witnesses document in writing all the changes made to the contract after you signed it and have this document notarized. Take it with you and enter a complaint for contract fraud.
Have your attorney contact the State Real Estate Board, much better response. Ask that the RE Agents license be temp suspended until a hearing can be held on the matter.
Consider alerting a reporter. Some much needed heat can often dispel fog, figuratively speaking.
From what I know...If you made a counter offer and they accepted, that is the binding contract. Anything that is not on the original contract and on the counter is not part of the deal. Do you have the signed around counter? If so, they have no right to change anything. Your agent should know better. If your agent has done something wrong...report them to the Real estate commission in your state and contact their board of realtors mediation group. Any tampering of documents needs to be reported and will make the contract null and void.
Both entities offer limited liability if there form are properly respected. As to which one makes the most sense for you that depends on a lot of factors including: 1) what are your ST/LT objectives., 2) what is your tax situation, 3) what is your exit strategy, 4) what if one partner wants out before another, etc.
I strongly urge you to consider doing some reading on the different entity types and then hiring an experienced RE attorney who can properly advise you onthe best structure for you.
First is the deal being financed by a financial institution? If so did your perspective buyer have an
appraisal done? If so will it support the contract price your buyer wants to show if not then of course this will not work.
second anything left after payoff will be considered as income ....Capital Gain and YOU WILL BE REQUIRED TO PAY TAXES ON THIS AMOUNT. If you still want to do this deal consult your accountant or cpa and have them calculate what the tax on this $10,000 will be. Have this amount held in escrow the amount of tax on this 10,000 before the deal closes so you are not stuck with this tax bill for your buyers $10,000 which when in his hands he may do whatever he wishes with. [ Edited by buildingpimp on Date 04/23/2006 ]
Thanks for the input. If I charge 1500 (cash) up front and $3500 (cash) after close, would all of that need to be on the HUD1? Also, would all of that need to be allocated as an "assignment fee".
I guess where I get a little nervous is trying to collect anything that could be construed as a commission. Folks in Georgia seem to be very cautious when an unlicensed individual collects any form of money that could be interpreted as commission.
I would like to collect the $5000 fee but make sure the fee is carefully defined as a something legitimate such as a "consulting fee", etc.
There are eight ways to take title, six of them allow for co-ownership:
1) Community Property;
2) Joint tenancy;
3) Tenancy in Common;
4) Tenancy in Partnership;
5) Title Holding Trust
6) Community Property Right of Survivorship.
For the pros and cons of each and an independent analysis, here is an excellent report from Chicago Title Company that should answer your questions. Enjoy:
http://www.chicagotitle.com//pdfs/8ways.pdf
Da Wiz
I belive It is bad idea to give your stuff away while you are still alive. There are huge tax saveing to getting property as part of an inheritance versus a gift. Your family will probably get your property tax free as part of an inheritance vs you paying taxes on your gift. Also, yes if anyone else is co-owner and they have a judgement it can attach to the property. Plua, I have seen where the children and the parents no longer speak to each other because the parents situation changed and they wanted to sell the house, but the children would not sign off on the deed.
Spend the couple of hundred to talk to an estate attorney. It will save you thousands and have a better chance of keeping your family together while you are alive and after you have passed.
Chris makes a couple of excellent points. The trust will shield the property from liens and encumbrances and the property itself will pass through probate to the kids upon death.
Since the interest of the beneficiaries under a land trust is personal property, and since the trust agreement expressly precludes the vesting of any legal or equitable right in a beneficiary, partition is not available.
Henry W. Kenoe, Keno on Land Trust, IICLE, p 3-012 Sec. 3-9 (1989)
CA. Civ. Code §872.210
CA Probate Code §50
CA. Probate Code §133(i)(c)
CA. Civil Code §955.1
Wile, “Judicial Assistance in the Administration of California Trusts,” 1`4 Stan. L.Rev. 231, 245-250 (1962)
CA. Estate Administration, §§33.11 to 33.35 (Cont. Ed. of the Bar, 1959)
Aronson v. Olsen, 348 Ill. 26, 29, 180 N.E. 565, 566 (1932); Breen v. Breen, 411 Ill. 206, 210-12, (1952).
Probate Code §§11600 et. seq. & 2463;
Da Wiz[ Edited by mtnwizard on Date 04/18/2006 ]
You need a lawyer, yes but you also need to visit the District Attorney. Best bet is to hire a former DA practicing law and have him vist the DA with you.
You and any other witnesses document in writing all the changes made to the contract after you signed it and have this document notarized. Take it with you and enter a complaint for contract fraud.
Have your attorney contact the State Real Estate Board, much better response. Ask that the RE Agents license be temp suspended until a hearing can be held on the matter.
Consider alerting a reporter. Some much needed heat can often dispel fog, figuratively speaking.
From what I know...If you made a counter offer and they accepted, that is the binding contract. Anything that is not on the original contract and on the counter is not part of the deal. Do you have the signed around counter? If so, they have no right to change anything. Your agent should know better. If your agent has done something wrong...report them to the Real estate commission in your state and contact their board of realtors mediation group. Any tampering of documents needs to be reported and will make the contract null and void.
Both entities offer limited liability if there form are properly respected. As to which one makes the most sense for you that depends on a lot of factors including: 1) what are your ST/LT objectives., 2) what is your tax situation, 3) what is your exit strategy, 4) what if one partner wants out before another, etc.
I strongly urge you to consider doing some reading on the different entity types and then hiring an experienced RE attorney who can properly advise you onthe best structure for you.
I-do-Rei
First is the deal being financed by a financial institution? If so did your perspective buyer have an
appraisal done? If so will it support the contract price your buyer wants to show if not then of course this will not work.
second anything left after payoff will be considered as income ....Capital Gain and YOU WILL BE REQUIRED TO PAY TAXES ON THIS AMOUNT. If you still want to do this deal consult your accountant or cpa and have them calculate what the tax on this $10,000 will be. Have this amount held in escrow the amount of tax on this 10,000 before the deal closes so you are not stuck with this tax bill for your buyers $10,000 which when in his hands he may do whatever he wishes with. [ Edited by buildingpimp on Date 04/23/2006 ]
What about charging $1500 at the time of the assignment and then drawing up a promisorry note for $3500 due after the closing.
Or insist that you put as much of the 5K as possible on the HUD and get the rest up front.
Thanks for the input. If I charge 1500 (cash) up front and $3500 (cash) after close, would all of that need to be on the HUD1? Also, would all of that need to be allocated as an "assignment fee".
I guess where I get a little nervous is trying to collect anything that could be construed as a commission. Folks in Georgia seem to be very cautious when an unlicensed individual collects any form of money that could be interpreted as commission.
I would like to collect the $5000 fee but make sure the fee is carefully defined as a something legitimate such as a "consulting fee", etc.
Thanks for the comments.