Can my parents gift me their house that they no longer live in and I pay them a fixed amount a month for as long as they are alive

Get Legal Help Today

 Secured with SHA-256 Encryption

Can my parents gift me their house that they no longer live in and I pay them a fixed amount a month for as long as they are alive

My parents own asecond home that they rent out can they gift it to
me in exchange for a set monthly amount are their any repercussions
to this for them or myself

Asked on June 15, 2016 under Real Estate Law, Alaska

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

If you pay them for the house, it's not a gift--you are buying it over time. The transaction will be treated legally and for tax purposes like a sale. However, because there is no final or set amount (since you don't know how long they will live), you can't affix a price to the transaction, which could cause tax and other problems. You are better off capping the max price at something close to fair market value: e.g. say the house is worth $250k. They could transfer title to you, and you could pay for it at the rate of, say, $1k per month for the next 20 years and 10 months, with the contract stating that if they both pass before the amount is paid is full, the remaining balance will be forgiven. This will give you a fixed maximum amount to be used for tax purposes while also letting out from paying if/when they pass early. A laywer can help you with the details of structuring the deal, but something like this is the way to go--for a variety of reasons, a sale (which, again, is what is going on if you are paying them money for the home) needs to have some definite price.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption