The Unknown Danger of Re-titling Your Home the Wrong Way

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I recently met a woman, by the name of Alice, who had inherited a family farmhouse from her parents many years ago. Over the years, Alice invested her hard earned money along with lots of love to restore the large Colonial home. To ensure that her son, Jim, would receive the home after she died, Alice transferred the deed of the property from her name to Jim’s. As with all real estate in Chapel Hill, North Carolina, the family farmhouse had greatly appreciated in value over the years. All was fine and well until Jim visited with a CPA at tax time and found out that if he were ever to sell the house, he would face substantial capital gains tax and lose a lot of the equity his family had built up in the house over the years.

 

Alice could not believe the terrible mistake she had made in trying to put her perfect estate plan in place. At one time, it made sense to do things like this in order to avoid probate, but not anymore, and as this lady told me, it was a hard lesson learned.

 

The simple, straightforward steps that Alice should have followed to efficiently transfer title of the home and minimize potential capital gains tax for Jim include:

 

* Establishing a revocable living trust

* Changing the title of the home to the name of the trust

* Naming her son, Jim, as the beneficiary of the trust

 

Because our attorneys only focus on estate planning which includes, wills, trusts, and probate, we can guide you to avoid an unnecessary loss of assets, allowing you to keep 100% for your family. If you want that peace of mind knowing that your wishes are met and your plans are put into place the right way and at the right time, contact the law firm of Thomas Walters, PLLC at (888) 787-1913 to schedule a free review of your estate plan or to register for a free educational seminar. For more information, visit us www.twestateplanning.law.

Jude Machin

Troubled Pixel, 4701 120th Blvd, Lubbock, TX, 79424, United States