How do I transfer property to my child?

Estate planning worksheet for writing a will

The question of how to transfer property to a child is far more difficult to answer than it was years ago. The transfer of any real estate property is a legal and financial matter. An individual or family should always consult an attorney and financial advisor when considering transferring a home, cabin, land, or any other property.

The exact means for the property transfer is different and should be determined based on the exact circumstances. Contact a  real estate attorney and financial advisor to decide on the best way to transfer property. Along with a consultation, use these other tips for a sound property transfer between a parent and child.

Avoid verbal agreements.

Parents and children should have many conversations when considering a property transfer. Some of the discussions should be between the parent and child who want to transfer the property. If there is agreement on the transfer, the property transfer should be documented as a legal property transfer to the child. This can be done through estate planning, such as via a will or trust, or with a deed. Verbal statements such as, “when I die, you get the house” likely will not withstand legal challenges and is not a guarantee that the child can take ownership of a property.

If there are other children or family members involved, it is recommended that other conversations occur. The transfer of a property, such as a family home or cabin, can affect other members of the family both emotionally and financially. Open communication with other family members can minimize any drama that could arise in the future.

Consider the options and timing.

There are many different ways to transfer property to a child. The transfer can occur as part of a trust, either as a revocable or irrevocable trust. A will is another estate-planning document that can clearly spell out the desire for a property transfer to a child. The transfer can also occur via a legal property deed transfer. In addition to the exact means of transfer, the timing of the property transfer also needs to be factored into the decision.

Property transfers, both immediate and via estate planning, comes with financial implications. For example, if the property transfer is made from a parent to a child with significant debts, the transfer can lead to issues because the property is now considered the child’s asset. The timing of the property transfer, either now or in the future, can affect the finances and costs of both parties.

Consult the professionals.

With so many aspects to consider, a property transfer should always occur with advice from the professionals. The property transfer should be documented legally by an experienced real estate attorney, both for the protection of the parent and the child.

The materials on this website are provided for informational purposes only and do not constitute legal advice. These materials are intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. Transmission of the information is not intended to create, and the receipt does not constitute, an attorney-client relationship between sender and receiver. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.

How can I be granted power of attorney for my parent?

power of attorney document for parent to sign for a childThere are a number of situations where a child would need authorization to make decisions for their parents; it could be part of a difficult medical diagnosis, estate planning process, or another situation. Whatever your situation, here are the basics a child needs to know when they need to become a power of attorney for their parent (a lawyer can give you more detailed information specific to your situation).

What is a power of attorney?

A power of attorney is a legal process where the parent authorizes a party (or parties) to make decisions on their behalf. There are two kinds of Power Attorney that can be named by a parent:

  • Power of Attorney for Finance and Property. The Power of Attorney for Finance and Property designates another person to make legal and financial decisions when a person (in this case, a parent) can’t. This document can limit those powers or grant a broad breadth to the “agent” (that person), dependent on the wishes expressed by the party (in your case, your parent).
  • Power of Attorney for Health Care & Declaration to Physicians. The Declaration to Physicians document states any preferences your parent may have regarding treatment or any life-saving measures they would like taken (or not taken) in the event of a medical emergency and gives the agent the power to make decisions in those situations. Examples of situations where a Declaration to Physician document would be used if the parent is in a deteriorating mental state, permanent vegetative state, unconscious, or in a coma.

When can the power of attorney be named?

A parent can name a power of attorney at any time, as part of the estate planning process or after a diagnosis. The parent must be able to understand what they are doing and the documents they are signing. The power of attorney named can be any competent adult, such as a spouse, friend, or child.

How can a child become a power of attorney for a parent?

For a power of attorney for finance and property, the document can be drafted to cover as much—or as little—as needed. The parent can give the child, their power of attorney, the power to sign tax returns or to completely manage their financial resources for as long or as short of a period as needed. Because granting power of attorney is a legal process and can drafted to fit a specific situation, the best way to get the process started and completed is to contact an attorney.

The materials on this website are provided for informational purposes only and do not constitute legal advice. These materials are intended, but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as an indication of future results. Transmission of the information is not intended to create, and the receipt does not constitute, an attorney-client relationship between sender and receiver. You should not act or rely on any information contained in this website without first seeking the advice of an attorney.