Placing your name on the title of your parents' house is not the same as buying it. Some parents may want to remove their names from the deed of real estate and place their children's names on it instead for estate planning purposes. However, sometimes there are repercussions from this action that may have not been considered. If you plan to take over your parents' property, consult a real estate attorney regarding the process and an accountant about how it will impact you now and in the future.
A quitclaim deed is used in real estate to transfer the name on the title of property to someone else, more than one person or an entity, such as a trust, corporation or limited liability company. On the quitclaim deed, the person who currently owns the property is the grantor and the one being placed on the title is the grantee. The form also contains a legal description of the property. Once it is signed by the grantor, notarized and filed at your local county records office, it is irrevocable, except by new quitclaim, and the grantee becomes the new owner (see Resources).
If your parents can no longer handle their real estate asset, they may want to solve the problem by signing the title over to you. Once you are the legal owner of the property, you can handle the sale of their home. If they do not want to be a part of the process, then signing a quitclaim to you will eliminate the need to involve them to complete the transaction. They may need to use the money from the sale or they may want to place it in a trust for their beneficiaries. Also, your parents may think that the transfer of the property now will reduce the burden to family members after they pass away.
You cannot "buy" your parents' home through a quitclaim deed. Even though the title on the property will be transferred to you, the mortgage, if any, will remain in the names of your parents, if they were originally on the loan documents. The only way to remove their mortgage obligation is to finance or refinance the house in your name. Then you will legally purchase the property, regardless of the amount that you pay.
An alternative solution to a quitclaim is to form a life estate, where your parents transfer the deed of the property to you, but continue to live in it until they die. With a life estate, the grantee on the quitclaim is named as the beneficiary and becomes the legal owner of the home directly after your parents' death. If the transfer is not handled properly, it may impact your parents' eligibility for receiving benefits, such as Medicaid and public assistance. Also, you may inadvertently change the amount of property taxes owed on the real estate. In addition, there may be federal tax implications for you when your parents pass away, so it's important that you consult a tax expert prior to initiating a quitclaim for the deed to your parents' home.