What’s the best course of action for signing over a mortgaged property to a relative?

My father is 78 years-old and he wants to sign his house over to me, but it’s not paid off yet. what is the best way for him to do this?

Asked on December 6, 2010 under Real Estate Law, Illinois

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

I think that it may be best for you to go and seek help from an estate planner in your area.  The obstacle you have here is the mortgage.  If the property is transferred without paying off the mortgage then the lender has the right to call in the loan.  I do not think that that is what you want here.  And if you can not obtain a mortgage yourself in a bona fide sale of the property you may have gift tax issues.  So go and see what you can do.  Possibly set up a trust with the house in the trust and then have you as the beneficiary of the trust?  That might work.  Good luck.


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