Can I Undo Recorded Deeds?
Deeds are usually set once they are recorded, but there is an exception to every rule. Sometimes, people participate in backyard estate planning, which is just a fancy term to describe any time someone puts his kid’s name on the title to a property with the intention of passing that property onto the child. When you consider the fact that most people in this stage are now elderly, you also recognize their houses were much cheaper when they bought them in their early years. This generation typically stayed in the same job for their entire career and also raised their families in the same homes they bought in early adulthood. That means the worth of these homes have likely quadrupled. The owners may now want to gift a home to their children or grandchildren, but once the new owners take on the house, they take it on as an asset of a higher value than it originally had. That is where capital gains taxes comes in to ruin the expected ease of backyard estate planning.This process is simply problematic because it is not the safest method and it forgoes tax benefits you could have received.
Technically, yes, you can fix this type of problem. You really have two options here. The first option involves you transferring the property back in a way that avoids reassessment. Keep in mind that reassessment at this point will be a potential threat to consider. Simply put, property tax reassessment is triggered any time there is a change in ownership over a property. While there are some exceptions that can help you avoid this, you have to make sure you are following every rule and expectation. One wrong step could mess up everything. The second option is a rescission deed. This option is harder and usually requires there to be some kind of legal mistake or problem within the deed that needs to be addressed. With rescission, both parties come to a mutual agreement, so it is beneficial if you are already on good terms with the other party. Rescission basically takes the contractual agreement away, and it restores both parties to their original standing before the initial creation of the deed.
Ultimately, the person inheriting the property is the one who benefits most from you undoing a recorded deed. Here at Aliav Law, we understand your desire to leave your estate to your family, but let us help you make sure that you are taking the correct steps. If you have already engaged in backyard estate planning, seek counsel as soon as possible. It is not impossible to get you back on the right track, but we also do not need to waste any more time in doing so.
Your next step is to join our facebook group called “Parents Protecting Assets in California”. We provide valuable information on protecting assets from future in-laws and creditors!