FAMILY TRANSACTIONS: INTRA-FAMILY GIFTING, FAMILY SALES AND HANDLING OF INHERITED PROPERTY TRANSFERS

We are experts in California intra-family transactions, family gifting, family sales of real estate, and transferring inherited property, utilizing all aspects of Proposition 13, Proposition 58, Proposition 60, Proposition 90 and Proposition 193 and new Proposition 19 to ensure the lowest tax consequence possible.

We can coordinate all aspects of your California real estate family transaction via video conference and teleconference. We can send a notary to your home and you never have to leave the house.

Our office can directly electronically file documents with most County Recorder’s Offices throughout California, providing swift turnaround (most law firms must outsource this task to title companies or third-party providers, we do this in-house).

See information and fee schedule below.

WARNING — CALIFORNIA PROPOSITION 19 HAS UPENDED THIS ENTIRE PROCESS AND WIPED OUT MANY BENEFITS OF ‘OLD’ PROPOSITIONS 58 AND 193 AS OF FEBRUARY 16, 2021. If a death or notarization occurred prior to February 16, 2021, you may be able to take advantage of the ‘old’ proposition 58 and proposition 193. Otherwise, as of now, all new family transactions (including sales, gifts and death) will be subject to Proposition 19.

Review our in-depth article on family transactions here, including overview of options and general tax considerations.

Equally important, Review our article on Proposition 19 and its dire reduction of the family transfer tax benefit here

Questions about a family gift, sale or inheritance? – Paid one-hour Zoom consultations ($295) are conducted daily and address virtually all questions, options and tax implications and strategies. (Book a consultation here.) Consultation fees are applied towards any future family transaction. Zoom consultations can, of course, be conducted from anywhere, including the comfort of your own home. While we are located in Newport Beach, California, we can assist with a family transaction for real estate located anywhere throughout California.

Real Estate – often a family’s largest asset – can be freely transferred, sold, gifted/inherited or a hybrid of sale and gift (i.e. selling below fair market value). Parents can sell to children using seller financing (or a ‘seller carry-back’) where the children pay the parents monthly mortgage payments just like a traditional loan, or, where the child obtains a new traditional loan (presuming they can qualify) paying off the parents and any mortgage the parents may have on the property. Equity in the home can be used as a “gift of equity” to assist the child with the downpayment (potentially allowing a no down payment sale, even with a traditional third-party loan). The property can be sold at fair market value, or below fair market value (the difference simply being a “gift”).

For more details on the process, review our in-depth article on family transactions here.

Ready to proceed with a private sale or transfer today? – See fees below.

While there can be significant tax and other financial considerations, we can make the process itself easier than you may think.

Our office excels with family transfers, family gifting, family sales, inheritance and other private transfers such as a sale to your tenants (or buying the home from your landlord – see our for sale by owner information here). We can facilitate all aspects of a family sale, gift or hybrid of the two, including all applicable paperwork and review of key tax considerations.

We prepare the purchase agreement, seller disclosures, and all required documentation, tax forms, can send a notary to your home and can even electronically record title with most California counties directly in our office. If applicable, we coordinate inspections, appraisals, due diligence, termite and/or other repairs. If a loan is involved, we work with the lender and a third-party title company (that the lender will require) and coordinate all aspects of the same to ensure a seamless transaction.

Inheritance / Trust Distribution of Real Estate

In the case of inheritance – when a loved one passes away – it can be a difficult and stressful situation for all involved. The Trustee, often a family member, can be under added stress with the ‘thankless job’ of distributing the estate and dealing with other family members and beneficiaries, all often with their own input. We can assist as to all aspects of any California real estate. We can review the trust and assist the Trustee(s) with real estate distribution or sale.

Often a trust provides options, such as a “share and share alike” option to distribute property to one beneficiary, and other assets to another, while still retaining the Proposition 19 and Proposition 13 property tax benefits. This is often called a “sibling buyout” or “sibling buy out” or “buying out my sibling”. This can be accomplished with additional estate assets or the use of a third-party loan.

Costs / Fees

We now have published flat rates for all family sales or transfers, though situations vary, so please call to confirm or schedule an initial consultation:

  • A pure gift or inheritance, no money exchanged, and the home value is up to $2,500,000 – a $1,000 flat rate, including (if applicable) review of the trust documents and filing the Proposition 19 exclusion paperwork. A “share and share alike” or “sibling buyout” inheritance distribution may have some additional complications, but can be included for minimal, if any, additional costs; if a new loan will be required, see next tier, below….
  • If there is a new third-party loan involved, and the home value is up to $2,500,000 – a $2,500 flat rate. $2,000 payable upfront, the remainder at closing.
  • Seller financing, including promissory notes and deeds of trusts, can be easily arranged for minor additional costs.
  • Some “sales” may require applicable 1099 filing(s) and/or California 593 filing(s), and can be included for minimal, if any, additional costs.
  • Home value above $2,500,000, please call. (we are routinely involved in seven and eight-figure real estate transactions)
  • Other situation, please call.
  • One hour private Zoom sessions are available to discuss legal or tax questions about a family sale, gift or transfer. Consultation fees ($295) are applied towards a sale or purchase if you proceed with our office – Schedule an appointment by clicking here.
  • Military and Law Enforcement Discounts available – click here for Military and Law Enforcement Discount information.

If you just have questions, our preference is an initial consultation with the key parties to discuss the transaction, review potential tax considerations and an overall plan for the transaction.  

To discuss your family real estate transaction, contact our office. If you are ready to proceed with a consultation, you can book directly by clicking here.

If you are ready to proceed with a transfer, just call or email to get started. Contact info below.

Contact by phone or email anytime:

info@lucas-real-estate.com

949-478-1623

Schedule an appointment by clicking here

Family Transactions discussed in depth here