Selling/Give Land to Grandchild

[missflo1959]

What is the name of your state? New Mexico

My in-laws would like to give an acre of land to their grandson, however, they would like to teach him responsibility by selling it to him at an extremely reasonable price and charging him only a percent or two in interest. They were considering drawing up a real estate contract and escrowing all the paperwork including the appropriate warranty deed and special warranty deed with a local escrow company in order that the legality of this transaction would not be questioned by anyone else in the family.

They have also expressed a desire to include a provision whereby this property would be considered paid off whenever they pass away. My question is; can such a provision be legally included in a real estate contract. If not, is there a better form of agreement that could be entered into such as a promissory note which could achieve the same results, namely, making sure the grandson is legally bound to make payments until their death, at which time it would be his regardless of what he still owed?

Wouldn't the same purpose be served if the grandson's name was added to the deed along with theirs right now and they were all listed as joint tenants with rights of survivorship. In addition, if a note was signed between them, but not escrowed or filed in the public records, whereby the grandson agreed to make payments directly to them, would this, perhaps, achieve the same result, upon their death and still avoid anyone challenging the legal ownership of the property?

Thanks!

 

[las365]

Is the grandson a minor? I'm guessing not, but if he is, I'm pretty sure he can't legally enter into a contract.

Giving is gving and selling is selling, and they are two different things. If they want to make a gift they should do so and if they want to sell the land to him, that's what they should do. They (the grandparents) should consult a lawyer who is familiar with real estate transactions and estate planning, in my opinion.

You, as one who is apparently not a party to either a gift or sale transaction, should probably stay out of it.

 

[missflo1959]

The grandson is not a minor. And just to clarify, they are "selling" it to him, at a very, very reasonable price, so in that sense they are definitely giving him alot of equity in the land.
However, they have a very limited income and want him to pay a small payment each month which will, in turn, help subsidize their SS income. The issue of selling it is quite clear cut except for their wish for it to be considered "paid in full" upon their death. This is
the provision I am wondering about. I am not involved in the transaction but I do have an interest in all parties benefiting since they are my in-laws and he is my stepson.

Thanks Again!

 

[HomeGuru]

What is the name of your state? New Mexico

My in-laws would like to give an acre of land to their grandson, however, they would like to teach him responsibility by selling it to him at an extremely reasonable price and charging him only a percent or two in interest. They were considering drawing up a real estate contract and escrowing all the paperwork including the appropriate warranty deed and special warranty deed with a local escrow company in order that the legality of this transaction would not be questioned by anyone else in the family.

They have also expressed a desire to include a provision whereby this property would be considered paid off whenever they pass away. My question is; can such a provision be legally included in a real estate contract. If not, is there a better form of agreement that could be entered into such as a promissory note which could achieve the same results, namely, making sure the grandson is legally bound to make payments until their death, at which time it would be his regardless of what he still owed?

Wouldn't the same purpose be served if the grandson's name was added to the deed along with theirs right now and they were all listed as joint tenants with rights of survivorship. In addition, if a note was signed between them, but not escrowed or filed in the public records, whereby the grandson agreed to make payments directly to them, would this, perhaps, achieve the same result, upon their death and still avoid anyone challenging the legal ownership of the property?

Thanks!

**A: everything you mentioned can be legally done. Consult a real estate attorney and be sure to inquire as to the tax consequences of each scenario.

 

[divgradcurl]

Is the grandson a minor? I'm guessing not, but if he is, I'm pretty sure he can't legally enter into a contract.

Minors can enter into contracts. The problem is, minors do not have to abide by the contracts they enter in to, unless the contract is for a "necessity" (food, housing, medical attention, that sort of stuff). A minor can enter into a contract, but the other part takes a risk that the minor can generally get out of the contract at any time.