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Irrevocable Trust

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Barnesed05

New member
What is the name of your state? California

My grandfather passed away in Sept 08, he had a revocable trust that obviously become irrevocable upon his death. All his assets where laid out and dispersed except the house which is supposed to go to my mother. My mother is also the first named Trustee on the trust. We had an issue with the person who created the trust and they will no longer work with us(he was shady as hell, trying to take things etc from the house). Since Jan 09, I have taken care of the house, which has included all maintenance/mortgage/major upgrades etc. I have not lived in it but rather rented it out at same cost of the mortgage and lawn service to avoid taxes etc.

My question is my mother wants the house to go to me, she wants nothing to do with it. Is there an easy way to do this without dragging the IRS etc into this?

Thanks.
 


LdiJ

Senior Member
What is the name of your state? California

My grandfather passed away in Sept 08, he had a revocable trust that obviously become irrevocable upon his death. All his assets where laid out and dispersed except the house which is supposed to go to my mother. My mother is also the first named Trustee on the trust. We had an issue with the person who created the trust and they will no longer work with us(he was shady as hell, trying to take things etc from the house). Since Jan 09, I have taken care of the house, which has included all maintenance/mortgage/major upgrades etc. I have not lived in it but rather rented it out at same cost of the mortgage and lawn service to avoid taxes etc.

My question is my mother wants the house to go to me, she wants nothing to do with it. Is there an easy way to do this without dragging the IRS etc into this?

Thanks.
Sure, once the house has been transferred into your mother's name, she can turn around and transfer the house to you. However, unless the house is worth less than 15k, she is going to have to file a gift tax return with the IRS. There won't be any gift tax actually due unless she has exceeded her lifetime limit for gifting, which is currently around 11 million dollars.

Also, someone is going to have to report the rental income and expenses that have occurred up until the house transfers to you. If the house is still in the trust, then the income and expenses belong to the trust. The reporting requirement cannot be ignored.
 

ALawyer

Senior Member
Sounds to me as if your mother has been the beneficial owner of the house since 2008. As under California's Proposition 13 (as expanded by Proposition 58) the house (if a principal residence or even if not, has an assessed valuation not in excess of $ 1 million) is not reassessed when transferred from parent to child (whether by Will or Trust, or by gift) it should not impact your real estate taxes (and further expanded to permit transfers of certain real estate to go un-reassessed when made by grandparents to grandkids under Proposition 193.

If the property is still registered in the name of the Trust, you and she should have it re-titled and she should quitclaim the property to you and file a new deed. You may want to set up your own Living Trust and take title to the property in your new Trust. Going to any local lawyer who deals with real estate and/or estate planning should not be expensive and could save you and your family significant hassle and money down the road.
 
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