How to structure partner purchase, advice please - Posted by Corey ND

Posted by Corey ND on June 17, 2002 at 22:37:44:

Jeff,

I guess I am realistic as far as my fathers fate goes, someday he will pass away such as I will too. My father is almost 70 years old and I would like nothing more than to see him be around when this loan is paid in full (30 year mortgage), but I am realistic when it comes to the fact that he probably will not be. I dealt with the death of my mother over a 12 year terminal illness so maybe I am a little desensitized to the whole thing. BUT I guess I don’t find this any different than discussing a will, and estate planning with a parent. That would be a similar situtation.

I appreciate all of the feedback from everyone.

Corey

How to structure partner purchase, advice please - Posted by Corey ND

Posted by Corey ND on June 17, 2002 at 18:01:52:

Looking at buying some SFR property. Going to partner with my father on some of it (but any partner would apply to this situtation). He will co-sign on the conventional loan and I will put up the down payment $$ and the fix up $$. What is the best way to purchase this property (making out the deed) so that when he is no longer around the property would automatically would revert to me upon his passing away. I don’t want to have to pay any inheritence taxes or have the property go through probate.

Would a trust be the best way?

Thanks for the advice,
Corey ND

Re: How to hold title with Dad - Posted by Nate(DC)

Posted by Nate(DC) on June 17, 2002 at 18:06:51:

Take title as joint tenants with right of survivorship.

That way when one of the joint tenants dies, title automatically passes to the other.

NT

Re: How to hold title with Dad - Posted by Corey ND

Posted by Corey ND on June 17, 2002 at 18:21:40:

How does it work if the mortgage is not paid in full when he passes away? What does the lender usually do? I have good credit just not enough income to qualify and too small of a loan for a no-doc.

Thanks again!
Corey

Re: How to hold title with Dad - Posted by Nate(DC)

Posted by Nate(DC) on June 17, 2002 at 20:54:13:

If the mortgage is not paid in full when he passes away, you would presumably continue to pay it until it is paid off. Otherwise, you would lose the property to foreclosure.

If the loan was made to both of you, you may want to check but I do not think the loan can be called just because one borrower is dead, if the payments are current.

In fact, I don’t think the loan can be called even if BOTH borrowers are dead, as long as their estates continue to make payments.

NT

Re: How to hold title with Dad - Posted by jeff

Posted by jeff on June 17, 2002 at 19:21:59:

i have a hard time with this line of questioning. i know it is a valid question but i also find it hard to plan real estate by discussing the death of my father this nonchalantly.

the survivorship theory is the way to go. it can be accomplished with a land trust with yuo set up as co-beneficiary. death of the beneficiary leaves the trust to the co-beneficiary through the survivorship rights. the beneficial interest is personal property and passes to the co-beneficiary out of probate. the loan stays in effect for you since this transfer of interest is only discolsed to the IRS and not the lender. the lender has the name of the trustee and not the new beneficiaries and nules informed otherwise they should have no way of knownig the death of the original beneficiary.

all of this is in theory since i have never really thought of it in this way, if im wrong im sure theres about 50 people here that are waiting to kick me in the tailbone for making stuff up on the spot. with my understanding of the land trust, i beleive this is correct.