Expert: Dick Dennis - 7/22/2011

Question
I own a home in new Jersey jointly with two other family members.  One of them wants to "gift" her 1/3 share to her daughter.  
Can you tell me if this is a complicated process, if the other two parties have to agree, and if there are tax implications involved?

thank you

Answer
Maybe, yes, and yes, Eugene, in answer to your three questions.

I recommend that 'A' consults with a tax expert or CPA to make sure her gift to her daughter is done correctly. Not knowing what her basis is in the property, I am not able to answer properly. She definitely would have a tax problem if it is not done right, actually, maybe her daughter would have the tax problem because she would inherit 'A's basis for any future sale.

All three of you would have to agree to do the transfer and to sign a Warranty Deed to her daughter. I have a better idea. It would take care of any problems and tax concerns.

All three of you sit down with an estate attorney and create a revocable family trust. If it is not all family, then simply a trust. The trust would own the property and however you were taking care of the property's responsibilities may continue. THEN 'A' may tranfer her interest in THE TRUST to her daughter. The attorney will advise how best to do that.

The three of you would be the co-trustees, and the daughter would be the trustee in succession. Or all three owners may decide on co-trustees in succession. See that estate attorney for a half-hour discussion to see if it fills the bill. I do wish you well.

Dick Dennis
dixiedee13@aol.com