If you own real estate, you might have wondered if it’s possible to give it as a gift, whether it be to a family member, charity, or other organization.
Many people gift real estate after they pass away by naming individuals or organizations to inherit their property in their estate plans. However, property can also be given in a way similar to how you would give any other type of present, like for a special occasion or holiday.
There are a number of ways you can gift real estate, so let’s explore some of the things you should know about it in this post.
Leaving Real Estate as a Gift in Your Estate Plan
If you’re planning to leave your home as a gift to someone in your estate plans, there are a couple of things you should consider.
First, if you choose multiple heirs, they may need to work together to decide how to deal with their inheritance (like whether they should sell the property, rent it out, or move in).
You should also consider that the recipient (or recipients) may be obligated to pay taxes on the inherited property, depending on the state and the federal tax regulations at the time the property is given.
Non-taxable Gifts in the United States
Whether or not a gift that you leave as part of your estate plan is taxable at the federal level usually depends on the item’s worth.
For example, something small like a family heirloom that has sentimental value but no real monetary value may not be subject to taxes, but something larger such as real estate could be subject to tax, so it’s important to consider who is going to receive the gift and whether or not this person will be financially impacted by it. You should also consider if having to pay taxes on the gift would be a burden on their financial situation.
Gifting Real Estate to Family Members Using a Quitclaim Deed
While you can leave real estate as a gift to a family member as part of your estate plan, you can also give your home or property as a gift in other ways.
When you’re transferring property as a gift to a family member or friend, generally a document such as a Quitclaim Deed is used.
Keep in mind that even though the property is intended to be given as a gift, you usually still need to include some sort of consideration (such as a small monetary amount of $1-10) in your Quitclaim Deed for your document to be valid.
Giving Property as a Gift
Giving real estate as a gift could be life-changing for whoever receives it, but it’s important that you are aware of the potential costs of giving it, as well as the fact that multiple family members may have to cooperate to determine how to divide the gift between them.
In general, as long as you have the proper documents and have done your due diligence with determining costs and the impact on family, gifting real estate should be a relatively straightforward process.
