Should we sell our condo to our daughter to make sure she gets it in our will?
We own the condo free & clear. We are 80 and 77 years old, and the property's estimated value is $175,000. She would put down approximately (on a loan) $50,000 and we would rent from her. Does this sound reasonable?
Hi Ferdinand. As long as it is included in your will, your daughter will most certainly get the property. Now, if you expect there to be some "drama" with her receiving the property where others may contest the will, then you may want to consider setting up a living trust, which would make your wishes a bit more bullet proof.
Here's an important point to consider when weighing whether you'd like to give to her now or at your death. At your passing, your daughter would receive the benefit of a "stepped up cost basis." What this means is that her basis or price of the property will become the value of the property at your death, This is an important estate planning strategy, since your basis could be a lot less than current values. For example, let's say you purchased your home for $50,000, but at your death, the value has climbed to $175,000. If she decides to sell the property then or later, her basis will be $175,000 (not the $50,000 you paid) and capital gain taxes, if any will be based on the $175,000 value. Yet another reason to give the property to your loved ones at death rather than giving or selling it to them during your lifetime.. | 08.22.16 @ 18:16