California  |  Real Estate Law

The facts in your question suggest that there are at least two areas of concern. The first is will the transfer be set aside as a fraudulent transfer. That is a transfer that is made for less than full value. for the purpose of preventing a creditor from collecting a debt.

The other problem is two fold. First the potential tax consequences. The second is that unless it is properly done your parents will lose control of their home and could be removed from it. This has occurred in the best of families.

Mr. Johnson's answer is correct. I would add that you have capital gains tax issues, and worst of all, if your parents have a mortgage, it could become immediately due and payable in full if they transfer any or all of their ownership of the property.

I agree with both prior answers. Fraudulent transfers are easily discovered by creditors, and outfits like Medi-Cal are always on the lookout. The plan simply won't work, and if the transfer were made, both the parents and the kids would be implicated in the fraud and liable for damages. Suggested reading: California's Uniform Frandulent Transfer Act, found at Civil Code sections 3439 thru 3439.12.