Property deed question...
 

Elderly parents (Mom still of sound mind, Dad can still read, sign his name, etc. and would sign), both will soon be unable to legally sign anything requiring IDs, etc.

Nothing nefarious, no estate issues, etc. ... I'd like (mebbe) to go ahead and just add my name to their deed, for reasons mom understands and she approves. Should have been done years ago... hindsight ... 20-200 ;).

Pros/cons to simply doing a Quitclaim and adding me?

I'm looking for FREE legal advice from high priced attorneys licensed to practice law in NC btw!

Or anyone else :D

Thanks!

What does adding your name accomplish?

Adding his name as Joint Tenant with Right of Survivorship avoids the property going through probate.
No downside if no sibs to claim undue influence and no mortgage to deal with. You won't be able to sell the property yourself without their signatures or a declaration of incompetency with you as guardian so long as they're alive though.

Advice from someone who's not a high priced atty anymore...

I think that depending on the complexity of the estate it can speed up the xfer process and maybe help with taxes. Also sounds like the possibility of the parents not being able to do things like sign for a sale, having him on the title would also allow that a lot easier I think

Mind, I've spend all of 10 minutes at the UF law school and that was looking for a bathroom and vending machine as I was walking across campus one day...

Depending on where his parents are, meaning if the state they're in allows it, couldn't he do that with with transfer on death? I personally have all my stuff (cars, house, bank accounts)TOD to my wife and then kids with all of my investments listing my kids as beneficiaries. Signing for sale, he could utilize POA I would think. I'm not sure that being listed on the deed would clean up selling since each listed owner needs to sign for the sale to be valid if I'm not mistaken.

From what I can find, NC recognized TOD. I think I'd TOD the deed and use a POA for possible sale. But I'm not an attorney and this is not legal advice...:D

I may be wrong but you won’t get a stepped up basis if your name is added to the deed. Tax implications need to be considered.

NC does not recognize TOD deeds. There is some conflicting info out there, but bills have been introduced that have not passed. Other assets can be TOD'd.

Yes, a durable power of attorney would allow op to act on his parents behalf in transferring assets, including real estate. Caution that some brokerages won't recognize a dpoa that's not on that brokerage's form document.

Yes, that's a good point. This blog indicates that so long as you didn't provide funds for the purchase you still get the basis step up on their death. https://www.linkedin.com/pulse/understanding-joint-tenancy-tax-griffin-bridgers/
But I'd confirm.

Yep! I did some looking after reading your comment and it appears they'll allow bank accounts and vehicles to TOD but not real estate. Seems weird. Seems like one of the the only ways to avoid probate at that point would be to use a Trust.

I had a firm refuse to recognize my DPOA for my mom because it wasn't their document. I told them I didn't care if it was their document because it was drafted according to Ohio law and if they don't honor it, they were welcome to explain to their client why the couldn't complete the purchase of the home. They changed their mind and accepted the DPOA.

Edit! This'll make your head spin if you dig into it! "North Carolina has allowed transfer-on-death (TOD) deeds since 2011."
From an attorney's site in Wilmington NC
https://donaldsonlawilm.com/how-to-avoid-probate-in-nc/

True. In CA a trust is the way to go. KFC, you should talk to a lawyer and accountant. Or a lawyer versed in accounting and taxes which they should be if they are in real estate.

(WAGs here)
Another idea would be to convert title to a family trust to avoid probate, with you as beneficiary.
It might get expensive if there are non-standard If-Then clauses but will save more money and headache in the long run. K.I.S.S.

POA, Med POA, executor of will, trustee will all need to be specified by your parents. https://www.fidelity.com/learning-center/wealth-management-insights/trustee-vs-executor

All sorts of problems happen during probate if siblings and wills are involved. For instance getting Mom cremated required pre-approval in writing by all siblings in case one party wanted burial instead, despite me having power of attorney and ability to write checks to caregivers etc on behalf of her account. It all went mostly smooth but there was potential for a massive problem there at the worst emotional time.

Our local taxes are capped unless there is modification or sale.
-Dad's rental was in a single-member LLC (back and forth a couple times the years before he died to his personal name, because he started dementia and got bad advice from the bank). The city actually previously wavered in writing any uncapping of the taxes. The year dad passed the city made family transfers of property seamless.
-Then the City used state corporate law to label it a "sale" because more than 50% of the LLC transferred. Taxes more than doubled.
-It was an expensive legal headache to bring the new valuation back into any kind of semblance to neighborhood comparables. So outrageous and fraudulent.
-I halfway suspect it was insider payback for him being an activist with neighbors and blocking a nearby development.

You might want a few hours consultation if a family transfer constitutes a "sale" and other potential issues. Do yer homework son. Gubmint entities are getting lean and they are getting hongary for tax money wherever they can find it.

Also look into pre-planning funeral costs and get it in writing.

Be warned. Almost everything in the industry (funeral homes and cemeteries) is currently being bought up by a certain corporation entity with the initials D.M. Almost every single one of our local family business options were, plus the cemetery in another state. I was shaking my head in disbelief.
But there were still a few independents around. For now.

And the prices? Through the roof Alice. Instead of a thousand for basic cremation, it was five ten twenty. Some wanted four grand just for the consultation process. Yeah.. You want an open casket full service? That's where the finance advisor starts nag-calling a dozen times a week to set up a layaway payment plan and get your down payment asap. Hard sell b.s. vultures.

Thanks all ... I'll prolly just do nothing else at this point.

I'd advise that you pay a good contract lawyer...look into living trusts. Laws vary from state to state, but living trusts aren't just for the uber wealthy...the one Cindy & I selected won me over when he said he doesn't go to court, that he writes contracts so there is no need for court.

Perhaps put the property into a Trust, with you as the successor Trustee.

If its a trust, it must be revocable to preserve the step up in basis.

I live in CA and a trust is the only way to go with Real Estate holdings.

Edit, well except for rich folks who have other paths. For my working class family a trust is a good option to not lose the control of family residence my parents worked so had to earn.

True about the revocable trust and can work this way in a irrevocable trust under conditions (property).

California is a community property state, so when a spouse dies, their share of community property receives a step-up in basis.
The surviving spouse's share also gets a step-up at that time, leading to what is known as a "double step-up".
When the surviving spouse later passes away, the entire asset gets another step-up, which can significantly reduce capital gains for the final beneficiaries.


NC apparently follows that closely. Listen to us, the PPOT lawyers at large.

(Disclaimer, I am not giving legal advice.)

Thank you ALL for the legal advice... those "retainer checks" are in the mail :)!

I appreciate everyone's input and perspective... the situation is unique, and it will work out just fine imo, left just as it is with no "last minute" tweaks . I investigated quite a few options several years ago, and between the attys, Covid, etc. this is where I'm at now...

I sure wish Greg and Milt were located in NC though... I would have hired THEM!

Thank you all...

I always say, Why do today what you can put off until tomorrow? That's how my dad's car ended up in probate.

"NEVER do today, what you can put off until tomorrow" - Me

Words to die by :D

Mom will be the proud co-owner of a POS F150 with 215K miles ;)

I'll not put that off ... saves a bundle on HO insurance ... a good daily driver too... nothing works :D

Why not an irrevocable property trust?

If the real estate is the primary significant asset, the deed he originally suggested is more simple-no need for an ein and tax return, k1's etc. If there are other substantial assets, yeah...

Thank you all ... Do high priced attys accept beer as payment?

I KNOW Nick will :)!

I just might do the CC deed thing ... because I learned something handling my aunt's estate a year or so back. Or I might just put it off until tomorrow ... or Tuesday ... like Wimpy :)

You have multiple factors to consider-
1- inherited step up basis goes away if you add your name to deed. At least for your portion of the property.
2- what sleazy attorneys euphemistically call 'medicaid planning' doesn't appear to be considered here.

You NEED to understand the implications of BOTH before putting your name on anything beyond a checking and savings account.

The first ... doesn't matter one iota. "I" want total control, and do not want a spouse (of an heir) to have ANY say-so ... whatsoever ... none.

All vested parties do "get it" ....and why ;).

They are almost 90, dad has been on borrowed time for a while.

Most docs, etc. were done decades ago ... attys (outside of this board) have been no help ... not worth even a beer ;).

Thanks!

Good point. details details

A) Would KC like to spend a few bucks on a loyerer now for planning? Avoiding future probate costs altogether and a whole bunch of extra time spent fuming while big bills are due, but the money is in flux into the unforeseeable future, meanwhile making a powerful friend?

B) Or would he like to absolutely pay more of that money to the gubmint at later time of sale in capital gains, from when the parents bought it back in the 1950s. Because you know any assessor will look and see a gold-plated box.


fwiw- Now is a good time to good time to get POA. Every entity will want that authorization plus a Death Certificate from the county clerk. Get a dozen stamped. Go through photographs together and film their memories. For them. For you and yours. Who is that in the picture? Family trees. Whatever they want to say. Get lists of people to contact for memorials etc. Make a list of major assets and what is their wishes. Figure out accounts so no bill collectors send big letters of garnishment five years from now. Lists. Lists. Lists. A sheet for each type. Also look into Hospice. They can provide everything and know what they are doing.

So much work to do at the worse time. Keep your sanity and make it a smooth transition.

John you are making assumptions I am quite comfortable with what has been done over the past 25 years, and what currently "is in effect" for my parents me, my family, etc. but it's probably not perfect.

I am a novice, but just did the executor part (for dad's sister) about a year ago here in NC.... I did learn somethimg new during that process.

I have talked to at least 6 attys over the past 13 years ...

I wish I had been buying Greg beers instead all those years too... or hay for his horses :)!

It's been a journey ... I've learned a thing or two... and appreciate every single one of you guys with experience also who post. Seriously appreciate the PPOT braintrust too ... better than one other trust from way back ... by a trusted atty & financial advisors... but I digress... I fired them ;).

Thanks!

As to the basis step up, not that simple. If the joint interest was gifted, you still get the step up. https://www.linkedin.com/pulse/understanding-joint-tenancy-tax-griffin-bridgers/
But there are complications, none of which LIKELY apply to KFC's case. First, for estate tax purposes its all still in the decedents estate (but there's a 27 million tax exemption for couples currently). Second, its complicated as to investment property and depreciation, but this is the family home.
And yeah, this isn't a Medicare dodge.

Prefer bourbon, but alfalfa works.

Greg how does this part make sense?
If the child immediately turned around and sold the property for its gross estate value, they would only have to pay tax on the appreciation in value of their 50% ownership (including recaptured depreciation on their 50%).

'immediately turned around and sold' implies no gain as it is sold at death. Only recapture would be picked up. So where is the tax on 'appreciation in value'? Or is this just poorly written?

Also, if the parent includes the half previously gifted in their gross estate how is that not double counting it as presumably a gift tax return would have been filed already reducing the estate? ie single parent, 300k home, adds child so 150k gift. parent dies, estate should be 150k however link says 300k is gross estate; YET exemption is already reduced by 150k. I realize these figures don't touch the estate exemption but the theory should apply.

PS- this is why I don't do estate work! And probably why I have a terrible time finding quality cpa's to refer it to!

As to the first, its somewhat poorly written. There would be gain to the extent of recaptured depreciation, depending on how the numbers crunched.
As to the double dipping, yeah. Its not a problem for the vast majority of us, but assuming you played by the rules and filed the gift tax return, the joint interest conveyed gets counted twice against the exclusion according to that brief blurb. It may be that there's a ruling or reg that offsets this, I'm not that deep into the weeds to know at this point.

Good of you.
I usually fall on the side of giving too much information and possibilities. And maybe some is probably not applicable/solicited/correct in unknowns.
Nothing bad intended.

^^^ No problemo John, I've learned a lot from your posts over the years and appreciate them!

Just flapping my wings and flying like a turkey ... I use Pelicans for navigation too.

Do you like alfalfa?

I'm running a "Tabs" here :D!

KFC, that'll be one bottle of Woodford Double Double Oaked, and whatever Greg is having. I got no use for the alfalfa...