Don’t Give Your Home Away

13 Jun 2023 · 1 min

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In this brief estate‑planning monologue, Jerry Taylor warns homeowners against transferring their house directly into a child’s name. Using a numeric example (purchase price $150,000, current value $650,000), he explains that the child would face capital‑gains tax on the $500,000 appreciation if the deed is changed while the parent is alive. He recommends instead placing the home in a revocable living trust so that, upon the owner’s death, the child receives a stepped‑up tax basis and avoids both capital‑gains tax and probate. The video ends with a brief plug for his newsletter.

Chapters

Do not transfer your assets to your kid's name. It may have seemed like a good idea at the time, but it's not. And this is especially true when it comes to your home. Let's say you bought your home years ago when it was $150,000. Now the house is worth $650,000. If you give that home to your child and put their name on the deed, when they try to sell it, they're going to have to pay the tax on that capital gain of $500,000. Here's the solution. Instead of giving them the home while you're alive, put it in a revocable living trust. That way, when you die, they will get your tax basis in that home and owe no capital gains tax. And the home will pass to them outside of probate court. Jump on my newsletter in my link.