Why transferring your property to your children directly is a bad idea.
Why transferring your property to your children directly is a bad idea
Parents sometimes think that one of the easiest ways to secure their property is to simply transfer their property to their beneficiaries (usually children) directly rather than using a trust. If you have multiple children and you transfer your property to them, than each recipient gets a certain percentage of the property. This is a bad idea for two reasons: the first is because if the recipient has property in their name and subsequently gets sued, that property is subject to the judgment. Secondly, if you as the parent transfer the property to your children, at some point the children may want to buy each other out and this will cause a property tax reassessment. A better way to distribute property is via a trust. You can include conditions in the trust that will help to minimize tax reassessments like one party getting the property in their name and have contracts that dictate ownership to the other recipients. There are many types of trusts available and you should consult your attorney about which type is most appropriate for you!
