A couple approaching retirement age were hoping to sell their current home and purchase a new one with their daughter, who is a single mother. They believed that living together would be the best plan, but they’re unsure about the best way to get a mortgage and take title to the property?
As a solution, it is suggested that the daughter buys the home in place of her parents, and keeps the home in her name. To do this, the parents might consider using the cash from the current property sale and lending it to their daughter to buy the new home in her name. The parents would receive the deed of trust or mortgage and create terms and conditions on the loan.
This would be considered a win-win situation, as the parents would have monthly mortgage payments and the daughter would be getting a house. It’s possible that this would result in a better rate of return by lending the money to their daughter.
Therefore, the title would say:
The entirety of one half of the property stands for husband and wife as tenants, and as joint tenants right of survivorship with the other half owned by their daughter.
Doing this will allow the daughter to automatically become the owner of her half of the property in the case that the wife or husband dies, and she will have full ownership of the home at the death of both husband and wife. Because the agreement is under “Joint Tenants”, there will be no need for probate unless assets are to be distributed. If in the event the daughter dies first then the parents will automatically own both halves.
Estate Planning documents needed:
- Last will and testament
- Durable power of Attorney, naming someone to step into your shoes in case one of you becomes incapacitated
- Durable power of attorney forhealth-related issues
- Living will, also known as an Advanced Directive
- Estate planners may recommend a fifth document, a specific power of attorney for financial purposes
An estate attorney must also be consulted in cases such as this to give you a more detailed information and proper guidance on the best way to resolve issues.
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