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I'm turning 70 this year, live in No. California, and my house is half-paid for. I thought up the idea of selling my house to my best friend or at least putting him on the title so that if anything happens to me (I'm ten years older than he is) he would get the house automatically. I would sell the house to him for the amount of the mortgage balance and he would let me stay there with no payments except the taxes, for which I would continue to be responsible. He has the cash to do this. Obviously this would help me a lot with living expenses. The mortgage is $130K, the value of the house is about $300K and the payments are $668.
What kind of person should we seek guidance for re: the tax an other consequences of doing this? Any input very welcome. Thanks in advance.
There's a few issues here. What about your friend's heirs? Suppose he passes first? How about a will? If you pass and he passes soon after, is it okay with you that his heirs get your home? Terms may be called something different in different parts of the country so I'll note there are at least two ways to take title...where the surviving partner gets the house and where the heir of the deceased gets the house.
An elder law attorney who does trust and estate work regularly.
He'll know the CPA needed for that help if/when appropriate.
^^^This. The bottom line is that you need to consult with an experienced attorney. There are a number of options, from selling or gifting the house while retaining a life estate, deeding the house as Joint Tenants with rights of survivorship or as Tenants in Common--whereby each interest would go to the respective heirs. Or you may want to set up a Revocable Living Trust to spell out your wishes...and a few options in between. Definitely attorney time.
Thanks for all your helpful answers. An estate attorney it is!
That's the best route. Be to ask the atty to discuss a transfer on death (TOD) deed, which would bypass probate and keep ownership in your name. also, mke sure you understand CA probate. I understand the process is user unfriendly.
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