Giving up inheritance-taking name off of deed

[happyscooter]

Well, I posted last week that I was considering taking my name off of the deed for my parents house. They are both deceased, and house was left equally to the children. I would like to relinquish my part and no longer be an heir. Where do I start? I thought of calling the attorney that handled the wills, drawing them up. Is it simple and how much will it cost? Thank you.

[Angel!]

If your name is actually on the title to the house, then all you should have to do is file a quit claim deed & it might cost like $25. I would call your county clerk & recorder to try to get details.

[happyscooter]

If it is held in the estate, is that the same thing? I am listed as an heir. Wills have been probated.

[happyscooter]

Would I need an attorney to file a quit claim deed? Or just have something notarized?

[thyme4change]

I'm not clear on why you just aren't putting this thing on the market at rock-bottom pricing and being done with it. Are your sibling being all sentimental and unable to get it done?

[happyscooter]

Ding, ding, ding we have a winner.

[happyscooter]

I tried to get them to sell now, they are being nice and waiting around on a maybe. Other things are factoring in here also.

[happyscooter]

OT, what is a 'junior member'?

[Savoir Faire-Demogague in NJ]

I'd never do any sort of trans like this without an attorney or a tax expert to determine the legal ramifications and the tax consequences.

[phil5185]

Happy, I would just sell it - lower the price and sell it - rather than agonize about becoming landlords. The only reason that it takes weeks or months to sell a house is that the price is too high, it is that simple (altho few people will accept that explanation).

You (and siblings) would need to claim the rental income on your income taxes, account for the depreciation while it is a rental, rewrite the insurance policy. Then the depreciation must be recovered on your income tax when you sell it. And in our area, we buy a city tax license and pay rental tax. And so on.

If you decide to 'gift' it to your siblings you must assign it to them and 'quit claim' it - and your siblings must agree to accept the gift - and then record the deed. As the giver, you would pay the gift taxes if any.

[happyscooter]

Phil, I am not the executor. Believe me if I was, it would have been sold 2 months ago.

[happyscooter]

If they don't agree to it and say maybe the insurance gets cancelled. Someone gets hurt and they want to sue the heirs. Can that happen?

[8 Bit WWBG]

...:::"The only reason that it takes weeks or months to sell a house is that the price is too high, it is that simple (altho few people will accept that explanation).":::...

Phil that is an easy thing to say as a buyer, especially a wealthy one who buys houses day in and day out. Not everyone is able to face, much less afford selling at too low a profit or even a loss. For some, renting it out for a while is far preferable to "giving" the house away.

[whoisjohngalt]

You can "disclaim" any inheritance. I would think executor would take care of that.

Lena

[thyme4change]

Not everyone is able to face, much less afford selling at too low a profit or even a loss.

Yes, but in this case, it sounds like there is equity in the house, and no one lives there. Wouldn't it be better to get rid of it for something rather than to carry it for a long period of time?

[Savoir Faire-Demogague in NJ]

I wonder if the poster can donate their share to charity? Or even if it is possible? Rather then just turning it over to their siblings?
Just an idea.

[phil5185]

You can "disclaim" any inheritance. I would think executor would take care of that.

That would have been true at death. But after the siblings have taken possession and the house is titled to them, a legal action has to take place to gift it or sell it.

Not everyone is able to face, much less afford selling at too low a profit or even a loss. For some, renting it out for a while is far preferable to "giving" the house away.

True enough - but the reality is, if you DO decide to sell, you must sell at the 2011 price, not at the 2006 price. No buyer is going to pay the 2006 price no matter how long you wait - and buyers don't care whether you are underwater or rich, they just want the 2011 price.

[8 Bit WWBG]

...:::"Yes, but in this case, it sounds like there is equity in the house, and no one lives there. Wouldn't it be better to get rid of it for something rather than to carry it for a long period of time?":::...

This is what I'm getting at. I'm watching someone close go through a situation like that. They are able and willing to wait for another year or two. They simply do not want to give away their money.

Obviously time will prove whether that was a smart move or a dumb move. If, in 2013, things are even worse, then I'm sure the monday morning QBs will relish saying "tsk tsk, should'a sold back in 2011". If prices rebound, the sellers can relish saying "glad I didn't listen to you and give the house away".

...:::"True enough - but the reality is, if you DO decide to sell, you must sell at the 2011 price, not at the 2006 price. No buyer is going to pay the 2006 price no matter how long you wait - and buyers don't care whether you are underwater or rich, they just want the 2011 price. ":::...

I agree this is a fact once you decide to sell. I maintain that in making that decision, some people are far too willing to advise others to simply fire sale the place. Its not as easy to settle for $20k to $50k less when that is YOUR $20k-$50k. Again, only time will tell.

Although now that I mentioned fire... what happens to a house in probate if it burns down?

[thyme4change]

I guess it depends on how much your carrying costs are. If you pay two years of taxes and insurance, and you get an extra $15k, but the $15k has a 6% relator price tag, it is down to $14.1. If insurance was $1200 per year, you are down to $11.7. If taxes were $3k per year, you are down to $5.7. If you spent a grand each year to keep the yard maintained, you are down to $3,700. If you kept the electricity and water on during that time, you actually didn't make $15k - but ended up in the same place as if you had sold earlier.

Always make sure you match the expenses with the revenue.

[Angel!]

Jan 20, 2011 16:18:49 GMT -5 happyscooter said:

Would I need an attorney to file a quit claim deed? Or just have something notarized?

When I did it, it was just a paper that had to be notarized & filed in the courts for a small fee. But, my situation was not that complex - the other owner of the house was buying out my portion. You probably would need to seek some advice as to how to do this when it is held in the estate.

[Deleted]

I agree with both of Phil's posts. I've got 30 years of experience in the real estate market so I've been through a few cycles. Unless the property is really hard to show e.g. uncooperative occupant who makes it hard to show, leaves the place a mess or bad-mouths the property because they don't want to move, you can bet that if you don't have an offer within 30 days the property is over priced; and significantly. Back when I sold property 1981-1986 my rule was we can list the property for whatever you want but if we don't have an offer within 30 days we're dropping the price by 10% or we're both wasting our time.

As Thyme points out, holding off making the hard decision can really cost you in carrying costs; e.g. mortgage, taxes, maintenance et cetera. And I'll add, the longer the property sits vacant, the greater the risk of something failing (plumbing especially) leading to significant damage or vandalism. There's a reason insurance companies don't want to insure vacant houses. If the majority of the heirs agree to hold off putting the house on the market then they need to commit to renting it for x period of time. But I sure wouldn't put the property into the heirs' names; that makes management a nightmare.

As other posters have pointed out, if the property hasn't transferred into the names of the heirs then Happy could decline this part of her inheritance. If title has transferred and there was more equity in the house, it might be worth threatening a partition suit; basically you file suit so that you can get a judge to order the sale of the property. But 15k isn't enough and I never believe in threatening something you don't intend to follow through on.

The quitclaim deed could work if you're siblings agree they want your share. It's actually pretty easy; you get a quitclaim deed from a title company that does business in the County where the house is located (make sure you talk to them first) and get the document notarized and send it back with the title company and have them record it. $25 is about right for recording fees. However as others pointed out no one can "make" someone (or entity) take a gift. If your siblings won't cooperate then you need to speak with an estate atty about how you decline title once it's been recorded. I really don't know how that's done with individuals. I know with public agencies there has to be a formal certificate of acceptance and with charities and other businesses there has to be a formal board decision.

Happy, your story reminds me why I was glad my mother made me executor and Trustee. It was a pain and took a while but I can easily see how my brother would have put me in the same situation as your sibliings have put you.

Good luck and let us know how you work it out.

[happyscooter]

Someone is supposed to let us know today. We'll see. This has dragged out for 2 months and if this person says 'no' then we are back to square one.

[swamp]

Jan 20, 2011 16:18:06 GMT -5 happyscooter said:

If it is held in the estate, is that the same thing? I am listed as an heir. Wills have been probated.

If no deed transfer has taken place, file a renunciation with the court. Talk to the attorney handling the estate.

[olderburgher]

Caution here. You may have liability for taxes on the property and gift taxes on what you give away to the other heirs. That isn't to say you can't proceed but you want to get out cleanly and with as little in tax liability as possible. Talk to your "tax guy" and the lawyer handling the estate. Maybe renouncing the share in the estate will work and maybe you'd need a quit claim deed instead. As mentioned above, will the other heirs accept your gift?

[8 Bit WWBG]

...:::"I guess it depends on how much your carrying costs are.":::...

Of course this must be considered. Indeed you could carry the house for 2 years only to end up with the same or less than had you just dropped the price from the get go. Phil and others have made this point many times, and it is one that you can only know for sure after the fact.

[thyme4change]

When it comes to holding onto a vacant property that you inherited - I would definately apply the saying "A bird in the hand is worth two in the bush."

[Nazgul Girl]

There is another way to go with this, although it may seem weird at first. It's a lot easier, though and will possibly cost you less than hiring an attorney. Technically, you have no responsibility to get this house sold since you're not the executor. The executor only has so long to get the estate closed. Your executor in question may not realize that. Around here, they have a year, and if it's closed in a year, they have to petition the court for more time, and show good cause as to why it's still open. "Sibling disagreement " is probably not a good reason.

Anyway, what I would do is just politely say, "Well, since you all can't seem to agree on what to do with Mom & Dad's house, I'll let it ride with you. When you figure out what to do with it, let me know. But since you already know my viewpoint, that I want it to be sold asap, don't come around looking for $$ from me for taxes, repairs, etc. And, if you let it go to rack and ruin, and don't keep it insured, I'll have to sue the estate !! " And then, just wait it out. The executor, after some hard thoughts and angry words about you to your uncooperative siblings, will sell the darned thing in the long run, and you'll get some of the sales price. I wouldn't lift a finger, or worry about the situation, in the interim. Sibs always go through this crap when an estate has to be settled. Don't let them whine to you.

[thyme4change]

One thing I will say, and that is the grieving process is weird and personal. I remember when a co-worker died, I left his office exactly as he left it. I couldn't stand the thought of packing it up - as if that would make it true. But, the guy that sat across the hall from me couldn't stand looking at the office with the guy's personal stuff in it. It reminded him that the guy was dead, every time he passed it. So, he went in and threw everything in a box, and I went in and we had a screaming match about it. Neither of us knew the guy very well, but we still had an emotional response and an opposite approach.

I'm guessing you are going through the same thing. You want to pack it up and be done with it. Your siblings somewhere deep down feel that selling the house is a cold way to slam the door shut on your parents. You are willing to give up $15k of cash to close that door. They are willing to wait out the market and deal with the hassle of a short-term renter, maintenance, etc. etc. to hold onto a tiny little piece of your parents.

You might consider a grief counselor to help you guys reach a decision.

[Nazgul Girl]

That's a very insightful analysis, Thyme. One good thing about my situation with my sibs after our mother died was that we vowed that we would not get into conflict with each over about "stuff", no matter how important it was to us, and we stuck rigidly to that vow, so that today we all have excellent relationships with each other.

The other thing was that we had assigned roles to each other, based on our spare time, abilities and proximity, so that when she was going through her last sad years with Alzheimers, I was the case manager based on my experience in the medical/gerontology industry, my sister was the bill-payer and wanted the role of caretaker concerning the medical treatment, and my brother, due to be long-distance, would come and fix and install whatever we needed for her house, and helped us get it into show shape when it had to be listed for sale. We had regular monthly meetings on the progress of certain things, such as my checking out different assisted living facilities, and then bringing my findings to the table for discussion. It worked out very well for us, and we almost never squabbled.

[happyscooter]

We aren't arguing. Executor thinks we should sell to someone who can't make up their mind if they want it/can afford it/needs it, etc... So here we sit. If no go, we are back to square 1. Again, if someone decides to come onto the property and gets hurt or whatever, can I be sued if I am an heir?