Gift to son ?

[rkser]

We are looking to gift a starter house to our unmarried son .

In case of an unfortunate future divorce would this gifted house be subject to equal division or remain his property.

Thanks

 

[Jerry1]

We are looking to gift a starter house to our unmarried son .

In case of an unfortunate future divorce would this gifted house be subject to equal division or remain his property.

Thanks

I think the answer is equal division, but you might want to talk to a lawyer. When we bought a house for my daughter, we put her name on the title with me and DW. Then, if something happened, the most she'd have to split would be 1/2 of her third. After a few years and seeing that son-in-law is a good man, we did a quit claim deed and gave her our share. Then, she gave half to her husband. We figured if anything happened at this point, he earned his share (DD is not the easiest person to live with. ). We also wanted to get our name off the deed in case of any liability issues.

 

[Telly]

We are looking to gift a starter house to our unmarried son .

In case of an unfortunate future divorce would this gifted house be subject to equal division or remain his property.

Thanks

You need to look at the laws of the state that the house is in. Yes, checking with a lawyer versed in that area is worthwhile.

In my state, a Community Property state, it could be done with care, but may be hard to live with the rules and never make a mistake to keep it Separate Property.
Here, a house or other asset that is previously held by one party, or inherited by one party, can be kept as Separate Property, but with careful actions.
Using a house as an example, any income derived from such property is community property (ie, 50/50). So renting it out to someone else, that rental income is shared community, but the house itself can remain Separate.

Any community money used to maintain, expand, etc. said property is co-mingling, the killer of Separate Property. I don't know for sure about taxes paid on that property, if its community money, that's probably a killer of Separate.
If your son was going to rent it out to someone at the point of his marriage, I could see it work out if done carefully. Living IN IT with his wife, that seems pretty tough to pull off to keep it Separate. That's assuming your state laws are like mine. I don't know yours/his.

Here, Separate Property is relatively easy to do if one gets a $ inheritance, and follows the no-comingling to the letter. Both DW and I have some Separate P. each. But not real estate! For us, it's easy to keep each separate Separate.

In general, all it takes is one co-mingling event to lay the trail of community into it. If marriage goes awry, that co-mingling event can be used by the non-separate party to try to claim 50% ownership.


A pre-nuptial may be something to try, but that's in the future, and again, laws of the state there need to be followed.

 

[MarieIG]

Think about helping DS make a larger downpayment.

Yes, there are ways to keep pre-marital property separate, but with a "starter house" it is likely that the future spouse would want your son to sell the starter and buy a marital house together.

You can always add more to the house pot later.

 

[rkser]

The state is Florida, I am wondering if anyone had come across such an experience.

I would rather give now when he is starting out & struggling, he would inherit anyway when we pass.

Getting our names on the house deed is an idea.


Thanks

 

[OldShooter]

You could put it in a trust with him as beneficiary and yourself as trustee.

 

[Car-Guy]

Keep the house in your name... Or rent it for a $1 mo You can always xfer the title later. 3, 5 or 10 yrs.

 

[rkser]

He will be married possibly next yr, transferring the title then will probably make the house a common property between him & his DW.

Maybe I am thinking too much into this gift

Whenever he (or they) buys a house on his schedule, we will make a larger gift for down payment and be done.

Thanks guys for your feedback

 

[ivinsfan]

You don't like his SO? You already know about the SO so this put a little different spin on it. This will look like an end run to exclude them. Is that what you want?

 

[kgtest]

Good question. Probably depends on the state you are in, and then in the unfortunate even like a divorce, the power and effectiveness of the attorney(s).

My late DS and her Ex went through a divorce and they both owned "assets/property" before they were married. I don't know how it all shook out, but since she was the "saver" in the relationship, she lost a lot more financially then her Ex who never was good at saving. For instance, she had lots of money in her retirement accounts, and more equity, so when it came time for the 50/50 split her EX had hired a lawyer willing to fight quite hard for his "half". He had a lot less equity, he owed back taxes (also DS was responsible for his half of that tax bill) and he had managed to convince my Sister to paydown some of his mortgage and pay off his vehicle while he was scheming the divorce.

That way, when it came time to take his "half" from her, her half was much larger and she ended up paying dearly. She passed away less than 3 years after that horrendous divorce. He had fought tooth and nail for custody of the children as well, since he didn't want to pay child support. In the end, he got basically what he wanted, full custody of the kids (since my sister passed away) and a good chunk of the assets. There are still a good amount of assets that the kids will get at certain ages per her will.

They both spent a total of over $230,000 paying lawyers, mediators, court fee's and he even hired some private investigators. They ended up selling a property so they could both have enough liquidity to sort out the 50/50.

I would say, nothing is ever fully protected. Even if the intentions seem well and good. I am on our home note by myself, but if I were ever to sell it my DW would need to sign the documents alongside me even though its legally not in her name at all.

Consult a lawyer, and get an understanding of the typical divorce settlements and how those shake out. When DW and I were going through a rough patch, her folks offered to help pay for marriage counseling. At the time that was probably the best financial support they could offer, and much cheaper than a divorce in the long run. We are doing much better. COVID and 3 little kids at home, trying to school them and work, just overfilled our buckets and we needed a reset.

 

[aaronc879]

Keep the house in your name... Or rent it for a $1 mo You can always xfer the title later. 3, 5 or 10 yrs.

Charging below market rent is considered a gift. Depending on the rent in the area the gift could be high enough to require an extra tax form every year.

 

[rkser]

We will help when ever he buys his house, after that our role will end.

After we pass, our kids & charities(IRA money) will inherit whatever is left.

This will keep it simple,

Thanks again