Upcoming Foreclosures

How to pass real property to brothers and sisters in an easy way with no hassles?

Long story short, I was given real estate property about 10 years ago by my father and now I can't handle the property taxes. In any case, I have 3 sisters and 3 brothers - actually they are step-brothers/sisters. I live in another state then where the property is located (Hawaii). I have my own property and the last thing I want to get caught up in is a family squabble. My father gave me another piece of property where I am now renting the house for the past few years. I'll keep that one, but I really want to pass the other property to my siblings and not have to deal with it ever. (The upkeep, the taxes, the insurance, etc.) I have heard of using a quit claim deed, but I head it may not hold up in court. How do I pass this property to them in an easy, no hassle, low-cost, less paper kind of way? Side info: There are no liens on the property - it is paid off - free and clear. Thank you to all who can help me with this question. Regards

Public Comments

1. A quit claim deed definitely will hold up in court. You should contact an attorney in Hawaii and have them draw up the papers. Also, talk with your accountant, you may have taxes due on this property due to the appreciation. Have you considered selling the property? Or renting it? A rental may pay for your taxes, etc. Or you could get someone to trade off upkeep for a place to stay. Good luck! PS - you could give it to me if you want. I'd be happy to let you use it when you wanted to. :)
2. A quit claim deed is in fact the easier, cheaper route. If you own the property 100%, it should hold up fine in court. It is those people who do not own the properties they quit claim that run into issues- the deed itself does not clalim you actually own the property. It just says IF you own it, you are deeding it to so-n-so. A warranty deed is the only 100% way to deed property, and also very simple to execute.... contact a title company and ask their fees for preparing the neccessary deed. It will need to be up to state/county standards for the area the property is located. Then you sign at the title co and they send it to be recorded. A quit claim only you sign-- usually with a warranty deed the 'buyers' (or recipients) also sign.
3. A quit claim deed will hold up in Court. No problem there. This would be considered a gift to your brothers and sisters so if it is worth more then 10,000 you will have to file a gift tax return (though will not have to pay any extra on it unless the property is worth over the lifetime exemption amount for gifts (I believe it is currently 350,000,000)). After you quit-claim the property you will need to consult an accountant.
4. Consult a tax professional and a real estate attorney. You need to protect yourself from any gift tax liabilities. If it's done wrong, and the taxes aren't paid properly, you could actually be accused of tax evasion, if the transaction makes it appear that it was done with the intent of avoiding taxes. You might be able to put the property in a trust first, or something like that, to avoid taxes. Considering you got the property from your dad at it's "stepped up" value, you could also have capital gains tax on any appreciation of the property after you inherited it. In Hawaii, I imagine that could be substantial over the past 10 years. I am betting there is a way to do this, either through a trust or something like that, to legally avoid tax issues. If you are just giving the property to the other siblings, it's not unreasonable for them to pay for the tax and legal services, since they are getting a free home. And if you do have tax consequences, they should have to pay them too. Bottom line, spend some money with a CPA and attorney to make sure this is done right, and pass the cost on to the people getting the free house.