Property transfer to heir

[pitblue]

What is the name of your state? Florida

My mother wants to do an "heir's transfer". She wants to tranfer 1 acre(out of 5 acres) of land with a small house on it into my name so that she can build a new house somewhere on her other 4 acres. Then she wants to rent out the house she transfers to me. She will continue to make the mortgage payments on this house. And eventually she wants to "buy" it back so that it will be back in her name. I've never even seen the property - she has not had it that long & we live 8 hours apart.
This is basically all the information I have on it, and I'm not sure if I want to get myself involved in this. What are the legal ramifications of such a transaction?

PitblueWhat is the name of your state?

[moburkes]

What is the purpose of this? When you say that she wants to rent out the house, I'm guessing that you mean she wants to rent it from you, and she would be the renter. Is there a mortgage on the house?

[FlyingRon]

I'm totally confused? She wants to make mortgage payments on a property she doesn't have ownership on? She wants to get the property back? She wants to rent something she has no ownership of?

If all she wants to do is partition the property, she doesn't need to transfer it to you to do so.

Transferring property to heirs while still alive is generally bad estate planning for both the grantor and the heir. The fact that she wants to make the transfer contingent is even more problematic.

We need the "rest of the story" has Paul Harvey would say.

[efflandt]

If she transfers part of property used as collateral for a loan, that loan likely becomes immediately due and payable. And if she does not have the cash to pay that off, the lender could foreclose. Does she already have cash from some other source to pay off the loan and build the home? Can you afford to pay off the loan if she cannot?

Then there is the matter of properly filing any required gift tax forms, by her when she gives you the property (whether gift tax is due or not), and by you if what she keeps from renting it out as your agent exceeds the annual exclusion. You would be liable for captial gains tax when she "buys" it back (which could be considered a partial gift if less than fair market value).

You would be liable for anything that happens on the property she gives to you, so you would need insurance. But if the lender did not already find out about the transfer, they would still need proof that "she" has insurance on the property (which she no longer owns), or they will charge her outragious self insurance.

The scheme is a ball of worms, some of which are baby snakes that can bite you and/or her.

[pitblue]

You guys are all awesome - yes you do need a license to be a parent!! Ha ha. She is always coming up with crazy ideas.
The county she lives in has a rule that you can't have 2 dwellings on the same property. She has a small house on 5 acres & wants to build a bigger house. So the county says that if she does an "heir's transfer" to me then she can build another house. Thats why she wants to do the "heir's transfer". Then she wants to buy it back, and that us why she was going to continue to make the payments on it.
But she is always getting herself into trouble with money schemes and this sounds like a recipe for disaster.

[moburkes]

What is the statute # of this law? How will buying it back be legal, if she will then again have 2 houses on the same property?