Confusing Family Property
Hi,
I just joined and I have a pressing question. Any help would be greatly appreciated! I'll try to make the situation clear..
17 years ago my sibings and I inheirited our mother's home in CA, clear and free, no mortgage. We (my sister and younger brother) bought out my older brother as he was a risky partner to own with and he wanted to be bought out. To do it, my sister and younger brother quit claim their portion of the house to me as they had horrible credit ratings and couldn't get on a loan with me. So the house is now in my name and my husband's name as joint owners, with the loan in our name also.
I now want to put my sister and brother back on the title and take my husband off the title. I would remain 50% owner, while my sister and brother would be 25% owners each. Is this possible?
What are the tax issues when you jointly own a rental property w/ people having various percentages of ownership? The house is rented and pays for the loan we took to buy out my older brother (a small loan but one we'll be paying on for years).
Can I take my husband off the loan papers at this point? And be solely responsible for the loan amount?
It's a mess but I'd like to clean it up! thanks, tjchops
First, speak to a property tax attorney before doing anything. Second, based on my understanding as a layman (that's why you should see an attorney) they can reassess the portion being distributed. IF that is correct, 50% of the home would retain its current Prop 13 value and the other half would be reassessed at current value.
Given the dollars at stake, a call to a pro would be a good investment. Good luck.
thanks for the reply!
Yes, you can just QC Deed your siblings an undivided interest, if this is your choice*(see below).
No, you cannot by yourself remove your H from the loan. The lender would laugh at such a request & tell you that H can deed to you, but he's gonna stay on that debt until it's all paid.
*This might be a golden opportunity for you to establish a Garn St. Germaine compliant trust, having you & your sibs be the beneficiaries of same.
The trustee could be you, but you might elect to have a 3d party be the trustee, for anonymity's sake. There are some very good & experienced ones around, such as Tom Standen, @ North American Loan Servicing, in MidPines CA; but you should check with the lender and see if they'd permit anybody else to be the trustee at first. You might have to do the original trust with YOU as the trustee, then change later on, privately.
A GStG is allowed to let you transfer your title to same, as per Fed Law, and then useful in letting you convey interests in the trust to others. GStG requires YOU to retain an interest.
A lawyer who practices in estate planning & wills & trust area is the one you'd want to consult about this.