Posted on: 26th Oct, 2009 05:35 pm
My parents wish to add me, their daughter, onto their Deed. Their home is fully paid. I believe this can be done with a Quitclaim Deed. My other question is: Will our taxes increase? THANK YOU!!!
No, your taxes won't increase. When you're added, use the word "or" instead of "and". I always recommend using an Attorney for sensitive paperwork like this - doing it incorrectly can be extremely painful later.
raymond i don't get your recommendation at all. why would you substitute "or" for "and"?
if all three will be owners of this property, then it occurs to me to be absolutely appropriate to reflect ownership as "a and b and c." the word "or" muddies things up - how would a lender then look at this? you'd be saying that either this or that one or the other one could be a borrower, and that would really gum up the works if one of them took advantage of such a situation.
please...what is your basis for saying that?
if all three will be owners of this property, then it occurs to me to be absolutely appropriate to reflect ownership as "a and b and c." the word "or" muddies things up - how would a lender then look at this? you'd be saying that either this or that one or the other one could be a borrower, and that would really gum up the works if one of them took advantage of such a situation.
please...what is your basis for saying that?
but i have to add...i thoroughly concur that engaging an attorney to take care of this transaction is the wise way to go.
I'm assuming they're doing it for Estate planning purposes. Using "or" leaves the house to the daughter without the need of a Will or Living Trust. After the second parent passes, the house will automatically belong to the last remaining person, avoiding the legal process that follows when a Will or Living Trust is involved. Using the word "and" means they all have to sign paperwork to get it into the daughters name exclusively. Since the parents won't be available, that's not possible, so she'd have to go through the legal process to get it into her name. Estate Planning and Probate Attorney's understand that concept, thus the reason for recommending the Attorney.
>>how would a lender then look at this?
A Lender isn't involved - the parents own the property. Title will have to change if they decide to borrow against it in the future.
It's interesting you mention that though, George, because I added my son to Title with an "or", for the same reason. I don't have a Living Trust or Will, and I have an FHA mortgage, so the due-on-sale clause can be invoked if the Lender finds out - but that won't happen as long as I maintain my mortgage payments.
>>how would a lender then look at this?
A Lender isn't involved - the parents own the property. Title will have to change if they decide to borrow against it in the future.
It's interesting you mention that though, George, because I added my son to Title with an "or", for the same reason. I don't have a Living Trust or Will, and I have an FHA mortgage, so the due-on-sale clause can be invoked if the Lender finds out - but that won't happen as long as I maintain my mortgage payments.
and of course, changing title subsequent to the mortgage is easy, and you're right - they won't even notice unless and until you default.