Can my parents sell me their property for $1 to protect them from losing it if they were hospitalized?
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Can my parents sell me their property for $1 to protect them from losing it if they were hospitalized?
I also want to build a home on a piece of their property and would not be able to get a loan to do that if it was not in my name.
Asked on March 9, 2012 under Real Estate Law, Washington
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
For your parents to sell their property to you for $1.00 could cause a lot of issues such as tax issues and claims by possible creditiors that the "sale" was a fraudulent transfer without adequate consideration to you.
I suggest that you consult with a real estate attorney where you enter into a contract to buy the property for a realistic amount in writing where your parents carry a promissory note secured by a mortage or trust deed on the property for the purchase price. Each year your parents can gift you $13,000 each from the promissory note under the Internal Revenue Service regulations ($26,000) yearly tax free.
The above suggestion might allow you and your parents to accomplish what you seem to desire without possible tax issues or claims by creditors.
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