Legal Question in Real Estate Law in Florida

My dad wants to leave me his house and wants to file a paper with the county so when he dies it will go to me with out probate, he does not want to do a trust. The county said he could quit claim it to me with joint tenancy with right of suvivorship or quit claim it to me with a life estate with me as the remainderman. which of these is best and why.

Asked on 8/24/09, 2:31 pm

1 Answer from Attorneys

Richard Stoffels Stoffels Law Group
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It depends, maybe they are all bad alternatives. I say that depending on the value of the house and what he paid for it. If he deeds any part of it to you during his life you inherit it at his tax basis (what he paid for it) which is probably considerably lower than its value at the present time. If you were to then sell the house, you would have to pay income taxes on the difference between his basis and the sales price. For example, if the house is worth 200k today, and he paid 40k for it, you inherit it and then sell it for 250k, you will income taxes on 210k dollars. Pretty significant tax.

Of course, if it is worth less than he paid for it, this is a different matter.

If you inherit it without ownership prior to his death, you get a stepped up basis to its value at the time of death. Meaning, if it is worth 240k at the time he dies, and you then sell it for 250k, you only pay income taxes on 10k, and probably inherit it without any estate taxes.

If I were your father, I would reconsider the use of a trust. It may not be the right thing to do, but there is no way to know that without discussing all of the circumstances.

The point is, that transferring the property to you early could be incredibly costly.

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Answered on 8/24/09, 3:22 pm

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