Father would like to add daughter on grant deed, wife is deceased and has been taken off the deed. What would be the requirements to add the daughter and have it recorded in the county of the property? Thank you.
3 Answers from Attorneys
It would be necessary to see the actual deeds in the chain of title. Once the present status of title is known, a new deed can be prepared as well as a Preliminary Change of Ownership form and a parent child exemption claim to keep property taxes from being reassessed.
The more important question is why the transfer is being made. Is this intended a s a gift.Do you plan to file a gift tax return? Is there a mortgage. Is there a due on sale clause so that this transfer will result in the entire mortgage being accelerated and now due and payable? What if the daughter runs into financial difficulty. Does the father want the daughters creditors to be able to take the house? The "why?" is more important than the "how to". This is not an action most estate planning attorneys would suggest.
Please seek counsel.
I agree with Mr. Christian's answer.......this is simply done, but requires some planning and forethought. Also, I'd point out that "adding (someone) to the deed" isn't really the correct terminology for what you're thinking of doing. We add owners to the title, not the deed. The deed itself is the instrument by which the change is made, but the title is the thing to which owners are added or removed.
Just to add to Mr. Christian's list of potential problems with adding your daughter to ownership of the property, it will have negative capital gains tax consequences. If a child inherits real estate by will or trust, the "basis" of the property is "stepped up." When you sell real property it is subject to capital gains tax on the difference between what you paid for it (the "basis") and what you sell it for. If you give property to a child before you die and they then later sell it after you have passed away, they pay tax on the difference between what you paid for it and what it sells for. If they receive the property by will or trust distribution only after you die, however, the basis is "stepped up" to the value of the property when you died. So they only have to pay taxes on the difference between what it was worth when you died and what it sells for. That can save thousands of dollars in taxes over what is paid if you make a gift of the property when you are alive.