Title after death

[helperdude]

California
If my name and my daughter's name are on the title of my home, and I should die, would my daughter be the sole owner of the home? Will there be any reassessments or additional taxes due?

[LdiJ]

Originally Posted by helperdude

California
If my name and my daughter's name are on the title of my home, and I should die, would my daughter be the sole owner of the home? Will there be any reassessments or additional taxes due?

It depends on exactly how its titled. If its joint tenancy with rights of surviorship then she would be the sole owner.

However, its not necessarily in your daughter's best interest to be added to your home prior to your death. That would be a gift, and her basis would be your basis. If instead, she inherits the home, then she would get a stepped up basis to fair market value.

Example:

You purchased the home for 100,000 and made 25,000 worth of improvements over the years. Your basis is 125,000. You add your daughter to your home, and after you pass away, she sells it for 250,000. She would pay capital gains tax on 125,000 (the difference between the basis and the sales price), of 18750.00.

However, if she inherits the home, and its fair market value is 250,000 (her stepped up basis) and she sells it for 250,000 then she would pay no capital gains tax.

[FlyingRon]

Depends on how the title his held now.
If held in common, your half just gets distributed as the rest of your estate.
If held jointly with survivorship rights, then she gets your share directly (all she needs typically to do is file the death certificate with the courthouse).

A house can always be reassessed but usually a death of a co-owner doesn't trigger one (as there is no dollar amount to the transfer).

No taxes are due on the joint transfer. On inheritance, no taxes are due unless you have used up your $2Million (currently) exclusion.

If your daughter's name is NOT currently on the deed, I'd recommend highly that you DO NOT add it. There are several good reasons:

1. There are elder law issues with regard to medicaid and reverse mortgages. If you ever need either one the transfer may screw that up.

2. Putting her on the deed isn't a way of stating what you want to happen to the property on your death, it is irrevocably giving up half the interest in the property.

3. If she inherits it upon your death, rather than getting it now, she gets favorable (to her) tax treatment as the basis steps up to the value on the date of your death.

There are better ways to grease the automatic transfer to her on your death.

[tranquility]

Transfers between a parent and child will not cause a property tax reassessment in California if it is the transferors primary residence. If not, the value up to $1 million is protected.