Legal Question in Real Estate Law in Virginia
Refi Broker Wants Grant Deed to One Co-Owner
Daughter and mother (retired) own house as JTs. They would like to refi and they have a broker who claims to be able to approve the loan on favorable terms. But they will only lend to the mother and they require as a condition of the loan that daughter deed her interest over to Mom. They claim Mom can always reconvey the property back to Daughter after the deal goes through.
1) What's wrong with this picture?
2) If Mom & Daughter do the deal as suggested, will there be a gift tax hit, and is there a good way to avoid it?
1 Answer from Attorneys
Re: Refi Broker Wants Grant Deed to One Co-Owner
Mom's best way to avoid the possible gift tax referenced in the question, is to look for another lender who is willing to make the loan to both mother and daughter as joint owners of the property.
The loan deal conditioned on the terms which the broker is currently proposing undoutbtedly contains hidden pitfalls which the broker has failed to disclose, and, therefore, mom and daughter would be well advised to avoid it.
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