$900 TAX TO GIVE HALF OF HOUSE TO DAUGHTER

One of the easy ways to avoid probate for a home or a bank account is to put your child, or your children, as "joint tenants" on the deed or on the bank account. In California, the term "joint tenant" means that if one of the tenant dies, the other tenant gets the property.

BUT WAIT, THERE IS A NEW DOCUMENTARY TRANSFER TAX, which is a relatively EXPENSIVE tax. In a city in Santa Clara County, the transfer tax could be around $900.00 for a property worth $200,000. (See California Revenue and Taxation Code section 11911.) You can NOT record the change to the deed without paying the tax.

In Santa Clara County the only exemptions to the tax are transfers between married people and transfers to and from a TRUST. (LA County has more exemptions, so check with your own county.)

The DOWNSIDE of avoiding probate by joint tenancy is that you lose control over your property while you are still alive. The joint tenant on a bank account can clean out the bank account. The joint tenant on a house can refuse to agree to sell the house.

IT IS WAY BETTER TO HAVE A LIVING TRUST and a will. (Your 'living trust' is a trust which can be changed during your lifetime.) YOU CAN AVOID BOTH PROBATE AND THE TRANSFER TAX.

REMEMBER THAT A TRUST CAN ONLY AVOID PROBATE ON PROPERTY WHICH IS HELD BY THE TRUST. If you do a trust, but do not put the property into the name of the trust, you have wasted the time and money you spent on the trust.

You should also have a will in case some of your property does not get put into the trust.

I am offering a recession special of a living trust and a will, including preparing a new deed for your home, for $750.00. This includes a discussion with me about your wishes. This offer is for ONE person. Married people may need a more complex living trust.

Note that my trusts do NOT have the property and heirs as exhibits to the trust. In the age of computers, being lazy and putting property and heirs as exhibits is making fraud too easy to accomplish.