Want to hand over ownership of your home to someone else? The most popular time to do this is when moving home. However, there could be other reasons you want to transfer ownership such as giving your property to kids when you die or giving property to an ex-spouse after divorcing. Understanding the different ways of transferring ownership can be important when it comes to reducing costs for you or your loved ones. This post lists 5 of the most popular ways to transfer ownership of a property and when to choose each solution.
Sell your home
Buying/selling a property is the most popular way of transferring ownership when moving home. Few people have the money to put towards a new property unless they sell their current one. Of course, you’re more likely to sell your home to a stranger than a friend or family member (although that isn’t to say you can’t sell to a family or friend).
Leave it to someone in your will
If you want to transfer property to a specific person when you die, the best solution is to leave it to them in a will. Without a will, your estate will be divided among your next of kin according to the laws of intestacy - which may or may not be to your wishes. Having a will in place can make the probate process potentially smoother and less costly for your loved ones, however they’ll still have to pay some probate fees and possibly taxes out of your estate. It is worth always hiring a solicitor to help you write your will so that it is legally binding.
Gift the property
Through a ‘deed of gift’ it’s possible to leave a property to a family member or friend as a gift. Gifting a property to loved ones while you are still alive can prevent them having to pay inheritance tax or certain probate fees. However, there are many rules when it comes to legally gifting a property - you will usually have to survive a certain number of years after gifting the property for full legal ownership to take place and the mortgage will need to be paid off first.
Consider a quitclaim deed
As this Deeds.com quitclaim deed guide explains, there is another solution to transferring ownership of a property if you want to gift it to someone while you are still alive. A quitclaim deed can be used to transfer ownership of a property to a loved one while you are still alive without transferring ownership of the contents. It is a faster process than a gift deed, but can have more potential snags, so you need to do your research to make sure it’s truly the best option.
Transfer it to a trust
Another popular way of transferring ownership of a property to someone while you are still alive is to leave it in a trust. Leaving a property in a trust to someone usually prevents it from having to go through the probate process and it is exempt from gift taxes. You also get to outline exactly who has control of the property and how they should manage it. This Bankrate.com trust guide explains more about how to pursue this option.
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