How do you transfer your home to your child? There is a home equity line of credit on the house.

Question

We want to know the steps involved. Where to seek advice, etc.

Answer 1

I'm not sure on the laws where you live...but wouldnt it be easier to sell the home to the child for like $100 and charge sales tax ?

Answer 2

Is your child a minor?  Or an adult?  The home equity line of credit (and mortgage if any) probably have a "due on sale clause" which would also apply in the event of a transfer of ownership.  So you have to pay that off in full and close the account(s) prior to transfer.  You also have to consider gift tax.  There are limits on the value of property, money, etc. given as gifts, both annual limits and lifetime limits.  You would have to pay gift tax on the value of the home.

It is called a "Quit Claim Deed," not a "quick claim" and the title conferred are not as good as a warranty deed.  This could cause title problems down the road for your child should he/she ever need a mortgage or want to sell.

You need an attorney who specializes in real estate law, and you need a tax accountant.  If you try to do this without both experts involved, you can get yourself into very serious and extremely costly difficulty in nothing flat.  Do not mess with the IRS -- they'll take the house and you to the cleaners if you make any mistake whatsoever.

Answer 3

The easiest and safest is to go to a real estate attorney. Pay the few hundred bucks to have him take care of all the paperwork and filings. Then FOLLOW his advice.

All real estate transactions need to have an attorney involved to cover both of you parents giving the property and child receiving it.

As for the line of credit though the bank that has it with the parents may want them to pay it off first. It is always possible for the bank to allow the child getting the property to assume the loan and start making the payments. You will need to go and have a sit down at the bank first thing and see what's possible.

Answer 4

It depends on when you want to transfer it.  You can get a quick deed and take it to the property/real estate department in the courthouse to change it over if you like.  You can buy the quick deed form in an office supply store such as Office Max or Staples.  Or you can go to a lawyer and have him/her draw up one or something different and file it in the same place.

Answer 5

You will have a gift tax issue given that he/she is not paying for it.  You need to see a lawyer and a tax accountant.