Should I complete a living trust or sign property over to my daughter?
do i need a living trust with my daughter being sole beneficiary and power of attorny .....if i sign my property over to her?
You want to know if you should prepare a living trust with your daughter as sole beneficiary, or sign over property to her now. If you own real estate, there can be a major advantage to your daughter if you leave her the property in a living trust, rather than give it to her while you are alive. Under IRS rules, the value of any real-estate you own receives what's called a "stepped-up basis" at your death. "Basis" is simple the cost figure used to determine profit, or loss, when an item of property is sold. If you bought a house for $100,000, that is (essentially) your basis. If you later sell the house for $250,000, you subtract the basis from that figure to determine your profit. So your profit wold be $150,000. However, if you left the house worth $250,000 to your daughter by a living trust, her basis would be "stepped-up" to the value it had at your death, the $250,000. So if your daughter then sold the house for that amount, she would have no taxable profit.
Of course, I do not know what property you own. Moreover, depending on what you own, complexities can arise either in giving away property or in leaving it by living trust. Still, it's been my experience that giving away one's property while alive can be inherently risky. There are a number of relatively inexpensive living trust options available both on the internet and in books. I suggest you (or your daughter) check some of these out, and see if a living trust is right for you.
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