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Quitclaim after divorce on dad's portion of house

1,415 Views | 7 Replies | Last: 3 yr ago by Sasappis
Treichler
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Cross posted on the B&I board:

Mom and dad divorced after owning house for 10 years.

Dad said mom could stay in house until the youngest finished high school - another 12 years.

Dad is remarried and "does not really need the money".

4 kids range from 35 yo - 20 yo and could use the money(payoff school loans, down payment on their own home, etc) so dad has said he plans to give his 50% of the equity to kids. Guessing this will be approximately $75k. (divided by 4 is $18,750 per kid).

What is the best way to do this? Concern is dad takes money, pays appropriate taxes on it and then goes to give it to the kids and it is over the $10k a year gift limit and creates another IRS action/tax etc.

Thanks.

Martin Cash
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AG
Not sure what you are trying to accomplish BUT: Never EVER EVER EVER EVER EVER use a quitclaim deed.
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histag10
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AG
As far as the 10k/kid gift limit, if any of you are married, i believe they can gift your spouse up to 10k as well. Dont quote me on that, but i believe my parents checked with their accountant on that at one point.


And quit claim deeds are essentially useless in Texas
scrap
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AG
First off the gifting limit is $15k per person per year. Also the Uniform Lifetime Gifting Amount is over $11 million per person. Obviously your dad and mom will have to coordinate the sell or transfer of ownership of the house.
Treichler
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Thanks for the info on the quitclaim deed - that will be avoided.

Is mom alive and still living in the house?
Yes still alive and has moved out, house is being updated and prepared for sale.

Is there an old divorce decree somewhere?
Yes,

Was the house paid off when the divorce was finalized?
Not paid off upon divorce.

If not, did mom pay the mortgage on her own or was there some sort of agreement on paying for it. Yes, mom paid mortgage for past 16 years and dad did a crappy job of paying child support.

Do mom and dad still talk? If they have to. Mom avoids talking to him if at all possible.

Does mom consent to the sale and giving up half the proceeds?
Yes - does consent to sale and agrees to half of the equity on the day of the divorce. In retrospect, i am guessing the wise thing to do would have been an appraisal along with loan payoff statement so that the equity on the day of the divorce would be recorded.

With the above being said, I am sure loan payoff on the day of the divorce would be easy enough to locate, the challenge would be fair market value of the house fourteen years ago. Correct?
Aggiemike96
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AG
I'm not a lawyer, or realtor, or title company representative.

Sounds like it would be easiest for your mom to sell the house and then "gift" each of the kids $XXX to represent your father's portion. Legally, the equity may be 100% hers. Therefore, it may be her decision how much to give to the children. Hopefully, you, your siblings, and your mother can arrive at an amicable arrangement and avoid lawyers digging into old divorce decrees and appraisers trying to establish a value from 14 years ago. If your estimate above was correct ($75,000) then run with it. If you're not amicable, then get ready for that $75K to diminish as lawyers' and appraisers' pockets get fat.
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