#RealEstate #QuitClaimDeed #LegalAdvice #Ohio
Hey everyone! 👋 I need some advice on a situation my husband and I are dealing with regarding a house we’ve been renting from his grandparents. They want to put the house in our names, but their lawyer suggested adding only my husband to the deed initially and then doing a quit claim deed to add me on later. 🏡💼
Here are some questions running through my mind:
– Why would a lawyer recommend adding only one person to the deed first?
– What are the complications or fees involved in adding two people initially?
– What are the benefits and potential downsides of going this route?
We’re located in Ohio, so any state-specific advice would be appreciated! Also, if anyone has been in a similar situation or has insight into the legal side of things, please share your thoughts. Cheers! 🌟
Possible Solution: Consult with a real estate attorney in Ohio to get a clearer understanding of the legal implications and best course of action. 💡📝
Parents are allowed to gift their children houses and, so long as this reduces the parents overall estate, this can be counted against the lifetime gift total. This avoids a tremendous amount of taxes (but not all of them) especially if it will be the child’s primary residence. Although you are married, you are obviously not their child so that’s why it is being done this way.
The lawyers approach here is the clear and obvious way to do this for maximum benefit. You can just be quitclaimed after exactly as described.
As someone who did a quit claim deed because, “It’s simple and you can do it yourself”, I wish I had spoken to a lawyer. At the courthouse they can’t help you with filling it out and my wife and I accidentally split ownership of the house vs joint ownership.
If you’re not going to use a lawyer then make sure you know how to fill out the quit claim deed before you go to the courthouse.
I think a lawyer playing “Devil’s Advocate” on your behalf would be well worth the investment in their fee.
Ordinarily, inheritance is separate property, not marital property. If the grandparents waited until they passed for ownership to pass to your husband, the house would be his separate property. They, or their lawyer, may be looking out for his interests and trying to preserve the house being his separate property. They may not want to tell you they have this concern, as of course it implies that you and the husband may divorce at some point.
It wouldn’t be less complicated nor would it cost less to do it that way, so that raises red flags. They would actually get double the annual gift exemption by including you. I suspect they just want to “keep It in the family” and find it awkward to tell you that. It’s their property and they can do with it as they please, so – nothing you can do unless your husband can convince them to do otherwise. If not, then the same goes for him once he owns it – he can give you ownership during his lifetime by deed (as someone else said, he should be sure he does it correctly) or after his death by Will, or you probably get some protections via state law. Not sure it’s worth paying a lawyer on your behalf (as someone else suggested) as again, it’s their property to do with as they choose. Edit: the $ you have contributed to repairs is something you or your husband should discuss with each other at least, and maybe bring up with them.
NAL, but I know that we had to buy a house without me on the deed. As Long as you are making financial contributions to the house, most likely you would get an ownership interest in the event of a divorce. What’s funny is that I know that because my husband was concerned on my behalf when we purchased our house and he is an attorney so he looked into it. Obviously, that kind of consideration makes divorce a lot less likely!
You need to talk to an estate lawyer in your state. A quit claim deed is all fine and good, but if (for example) I give a quit claim deed to several different people, the person who gets to the county recorder first with their copy is the one who gets title, and the remaining quit claim deeds become unenforceable. What matters is when they are recorded, not when they were created.
No no no. If husband decides no— you’re out
You want both names
I believe husband raised fhis
When you get a property from a quit claim, you also get the previous owners purchase price as the basis for capital gains tax purposes. Get an estate attorney
Your husband should pay you out and take the House on him
An individual can gift up to $18,000 per recipient each year without tax implications (married couple can double that to $36,000 per individual). It is counted per recipient. So a couple could give $36K to recipient 1, and $36K to recipient 2, and there are no tax implications.
However, if more than that is given as a gift in a single year to s single recipient, it will reduce the amount of the gift giver’s estate tax exemption by the excess. The lifetime estate exemption is $13.1M.
So if a gift giver gives a gift of $118K in a year, they file a gift tax declaration with their taxes for that year of $100K (teh amount over the yearly allowance), and the $13.1MM estate tax exemption is reduced by $100K. When that gift giver(s) dies, their estate is exempt from taxes up to $13MM, not $13.1MM.
So if OP’s husband’s grandparents give the house to husband, then the grandparents would need to file a gift tax declaration for the value fo the property above the $36K yearly gift allowance (its doubled because grandparents are married).
As for adding the wife, it shouldn’t matter whether she is related by blood or not. The only persons with tax implications is the grandparents. Whether they give just to husband or OP has tax implications, but would likely save on taxes by giving to both.
Grandparents can make a $36K gift to husband; and a $36K gift to OP. By only giving to husband, it is likely over $36K (as it is a house), and grandparents would have to declare it and their estate tax exemption would reduced.
Ohio doesn’t have a gift tax law, so only federal tax law is impacted.
Everyone who gave you a tax based answer is wrong. I’m assuming your husband’s grandparents don’t have $25 million in assets, and an outright gift doesn’t do much anyway.
The reason why they would do this is so that they could give it to their grandson and not to you. That’s it.
How are the grandparents’ finances? If there is a possibility that they will need medicaid benefits in the future, there is a 5 year clawback when evaluating their assets. Definitely bring this up with your lawyers.
They did it because they want to make sure he gets it and not you. In the event of a divorce, he shouldn’t have to split an inherited house with you.
I would be careful with this due to the Medicare lookback rules. If Grandma to Grandpa need to use Medicare in next 5 years the government would be able to seize the house to pay back the trust fund. Make sure that they have the assets to cover a hospitalization before accepting this offer. This is why I strongly believe anyone under the age of 60 who owns their real estate free from any liens should transfer the house into a trust as part of the estate planning process