I plan to transfer a free and clear real estate property to my 7 years old son and want to appoint myself to be a trustee to manage it. Can I take the title of the house back before my son is reaching 18 years old?
4 Answers from Attorneys
I'm not sure what your reason would be for transferring property into the name of a 7 year old. You really need to establish a trust, then put the property into a trust in which the son is the beneficiary upon your death or some other specified event happening. So long as you remain the trustee of that inter-vivos trust, you control what happens with the property until you are deceased or the other specified event transpires. If you are doing this to attempt avoid a creditor, the way you described transferring the property is not going to accomplish protection of that asset from creditors, and may not allow you to recover the property at a later date. You need to consult with a Trust and Estate attorney if you are doing this for estate-planning purposes, or an asset protection attorney if you are transferring the property to avoid creditors.
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There is no possible reason to transfer title to real property to a 7 year old child that would be legally valid, except under the Uniform Gifts to Minors Act as part of a comprehensive estate plan (and you'd have to be very wealthy for it to make any sense even then), and the negative tax consequences could be enormous. If the transfer is to protect it from creditors, it won't work and could get you and your son sued for a fraudulent conveyance. If it is for estate planning purposes, it is about the worst possible way to get it to him. Dozens of other options that are far more tax and probate advantaged are available. Whatever you are trying to accomplish, you are going about it wrong and could get yourself in a lot of legal mess. Talk to a lawyer in person before you do anything.
I agree with both previous answers that this is almost certainly a bad idea, especially given that you're wondering if you could get the property back into your own ownership before your son turns 18.
Minors can own real estate, but when they do, it is almost always acquired by inheritance. Minors cannot sell real estate, or manage it. You'd have to get a court order to re-acquire the property before your son was 18 (or became emancipated), and the court would probably require you to pay him fair market value.
Often, people consider "temporarily" placing property in the hands of a relative in order to shield the property from a creditor's lien. This is fraudulent. See the Uniform Fraudulent Transfer Act in the Civil Code, sections 3439-3439.12. Creditors can find out about such transactions from the public record and have them nullified.
Also, making a gift of real property has bad income-tax consequences for the family as a whole.
You can set up a trust, in which you are the trustee, and he is a beneficiary. As long as the trust is revocable, you can change your mind and revoke the trust, until you die.
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