When you gift property to others, you may want it to be a positive experience for the person receiving it. But since everyone has unique financial considerations, you should always work with a lawyer to discuss the how and when of transferring these property types. An attorney can help you decide on the method and timing that works best for you and the recipient.
Transferring property is often driven by good motivations. You want your loved ones to be able to have access to this property should something happen to you. However, be aware of the possibility of taxes that may apply and influence your beneficiary’s financial position. As generous as it might seem to start by transferring property to your loved ones during your lifetime, you may wish to delay this transfer until after you pass away, especially once you know the tax implications.
When you convey a deed to property to your next of kin before you pass away, they may be facing a significant tax bill if they ultimately decide to sell that same property in the future. This is because the basis for that property will be associated with the date that you made your purchase, not the date when you made the gift or when the beneficiary received that gift. This could mean substantial capital gains taxes on a property sale.
Make sure that you work with a financial professional as well as a qualified estate planning attorney to cover all of the pros and cons of transferring property during your life and after you pass away. The support of an attorney is extremely valuable in starting this process; let our Pasadena estate planning lawyers know what you need help with to learn more.