CA Real Estate
California Real Estate Law Questions? Get Answers Online Now.
Hello and welcome! My name is ***** ***** I am a licensed attorney who will try my very best to help with your situation or get you to someone who can. There may be a slight delay in my responses as I research statutes or ordinances and type out an answer or reply, but rest assured, I am working on your question.
Are you referring to making someone a part owner of the house?
Or in gifting them a certain dollar amount of the equity in the house?
Would this be a gift right now, as in taking out a loan to make the gift, .... or a future gift, like in a will?
I apologize for the delay. I had to leave my office for an appt for a bit..
Give me a few minutes to type out a response..
If you are going to make them a partial owner of your home, then you could do so in one of two ways... you could either add them to the deed by making them a "joint tenant" on the deed, which makes them a 50% owner along with you. If one of you should pass, then the survivor instantly becomes the sole owner.
Or you could make them something less than a 50% owner, say 25% owner, by using a "tenant in common" designation in the deed and that would limit their ownership interest. If one owner passed, their interest passes down through their estate to their heirs.
But just be aware that if your child was sued and a judgment entered against them, then the creditor could come after their ownership interest in the house for any debt that they owe..
So it has its downside as well.
If you are looking to take it out of the reach of creditors, you may want to consider placing it into an LLC or an irrevocable trust so that your name is ***** ***** it anywhere as the legal owner...
There is an existing mortgage on the house, so using LLC or co Tennant would probably be difficult as loan would have to be done again.
No, not really. You can deed the property over if you choose to. Even if there is a "due on transfer clause", in 15 years of real estate law, I have never seen a bank exercise that clause as long as someone was paying the mortgage. They only care about getting paid because the property still stands as collateral for the loan even if it is deeded to someone else.
If I gift it can my child file a lien against property locking up any equity?
If you gift it, then you are giving it to child, so there wouldn't be a lien.... Now if you borrow money from them as evidenced by a Note and a mortgage that is recorded, that would tie up the equity because the mortgage would sit in a higher priority than any judgment that you may have entered against you later.
So you borrow $50K from a child, for example, and they record a mortgage on the property, then that locks up that equity...