Gifting a Home To Your Child? Here’s How To Make It Happen

Buying a home is one of the most significant investments you will ever make, and it’s not uncommon for parents to want to share that investment with their children. Gifting a home to your child is a generous and loving gesture, but it requires careful planning and consideration to make it happen. In this blog post, we’ll go over everything you need to know to gift a home to your child successfully.

First and foremost, it’s essential to understand that gifting a home involves a complex legal process that requires the help of an experienced real estate attorney. An attorney can assist you in transferring the property deed and handling any necessary paperwork, such as the gift tax return. Keep in mind that gift taxes can apply to real estate gifts, so it’s crucial to work with an attorney to ensure compliance with all applicable tax laws.

Another important factor to consider when gifting a home to your child is whether you want to do so while you’re still alive or through your estate plan. Gifting the home while you’re alive allows you to see the joy it brings your child and can also help reduce the estate’s value for tax purposes. However, if you choose to gift the home through your estate plan, you can retain ownership and control of the property until you pass away.

If you decide to gift the home while you’re still alive, you’ll need to consider whether you want to sell or transfer ownership. Selling the property means that you’ll receive the fair market value of the home, and your child will become the new owner. Alternatively, you can transfer ownership without selling the property, which means your child will receive the home without any cash changing hands. Transferring ownership can be a more tax-efficient option, but it requires careful planning to avoid any unintended tax consequences.

Before you gift a home to your child, you’ll also want to consider any potential issues that could arise. For example, if your child is married, you’ll want to ensure that the property remains separate property in the event of a divorce. You’ll also want to consider any potential creditor claims against your child, as the home could be at risk if they’re unable to pay their debts.

One option to address these potential issues is to set up a trust to hold the property. A trust can provide protection for the property in the event of a divorce or creditor claim while also allowing you to retain control over the property during your lifetime.

Overall, gifting a home to your child is a significant decision that requires careful consideration and planning. Working with an experienced real estate attorney and financial advisor can help ensure that the gift is structured in a way that’s both tax-efficient and protects your child’s interests.

If you’re considering gifting a home to your child, contact us today to discuss your options and begin the planning process.

Contact us today to schedule a consultation with one of our experienced real estate attorneys and start planning your gift of a home to your child. We’ll guide you through every step of the process to ensure a successful transfer of ownership.