Legal Question in Real Estate Law in California

Transferring property from parents to children while the parents are alive is pretty much the biggest financial mistake the average person can make. The fact that you don't even realize that you would need a deed as the starting point for each transfer makes it incredibly clear that you have no understanding of the consequences of what you are talking about doing. Just for starters it can cause your parents to be liable for gift tax on the value of the property, it will be an event of default on any loans they have on the properties, entitling the lenders to demand immediate repayment in full or they can foreclose, it will cost you as much as six figures in additional capital gains taxes whenever you go to sell the properties, if your parents need Medicare or MediCal now or in the next few years they can go after the property and take it from you, if after the transfer your parents owed more in other debts than they have in cash and other assets, the entire transaction would be fraudulent transfer that could get all of you sued by creditors, the list goes on and on and on. The only way to avoid this is to pay your parents FULL market value for the properties, or to set up a will or trust so that the properties pass to you once your parents die, rather than now.

I agree with what Mr. McCormick stated, and I add that purchasing real estate is one of the biggest and most complicated things you can do. It is not something to do without the advice of a competent attorney.