Summary
Q: My husband and I own a house. The mortgage will be paid off in about five years. We would like the house to become officially our son's house but continue to live in it until we decide to live in a retirement home, or until we die. We would be quasi-paying rent to our son. We do trust our son. The question is whether this is a good "business" move, i.e. tax or whatever. - Anneliese Dessart
A: If you really do trust your son, sell it to him at a fair price and rent it back from him as you say. Or you might be able to sell it to him but you and your husband retain a life estate in the property. The fair price he would pay you would obviously reflect the life estate interest you retain. The life estate you retain lowers the fair price he would have to pay to you to compensate him for your occupancy rights. This could lower your tax liabilities.See the full content of this document
Extract
Life Estate Can Help Elderly with House
When a person has a "life estate" in a piece of property, he or she enjoys almost the same...
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