Somerville, MA asked in Estate Planning for Massachusetts

Q: I would like to know what the correct process is to transfer my house under my son. ? or the best way to do it?

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1 Lawyer Answer
Michael M Marques
Michael M Marques
  • Estate Planning Lawyer
  • Boston, MA
  • Licensed in Massachusetts

A: There are a few questions you need to ask yourself first. a) Do you wish to retain control over your home and the right to live in it? b) How will your estate tax amounts change with each option? c) What capital gain taxes may your son have to deal with? d) Do you wish for your son to avoid probate? That being said, there are a number of different methods to transfer your home to your son. There are benefits and burdens to each choice. The first option is through your will. Upon your passing and after probate, your son will own the home. Capital gains taxes will then be calculated based on the value of the home when you pass. A second option is to transfer the home into a trust. Trusts vary depending on the client's position. The home is placed in the trust while you are living. This may be a revocable or irrevocable trust. Certain trusts bypass the probate process, which may be very beneficial. You will want keep in mind that if you transfer complete ownership of a home to your son, you are no longer the legal owner. You should also be aware that you are not only gifting the actual house, you are also gifting your equity. A third option is adding your son to the deed. Both you and your son will share ownership and in the event of your death, he can either sell or retain the home. A fourth option is the quitclaim deed. A quitclaim deed is usually the easiest way to transfer your ownership interest in the home to your son. Unlike other kinds of deeds, such as general and special warranty deeds, quitclaim deeds make no warranties or promises about what is being transferred. A quitclaim deed will simply convey your interest in the property. A fifth option may be to sell the home to your son. If you sell the house for less than fair market value, the difference in price between the full market value and the sale price will be considered a gift. You can use the $17,000 annual gift tax exclusion as well as the $12.92 million lifetime gift tax exemption on this gift. Lastly, you can sell the house at full market value, but hold a note on the home. The note should be in writing and may include interest. You can use the annual $17,000 gift tax exclusion to gift your son $17,000 each year to help make the payments on the note.

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