Who Owns the House and Land – Gifting Family Property

Protect Your Assets:

Question: Our family and extended family has always lived close to each other. We own quite a few lots of land that homes could be built on. We would like to give one to each of our children but we would like to make sure that it remains in the hands of our children and grandchildren-not their spouses. What do you suggest?


Whose name is on the title to the house is one of the most emotional issues in any marriage.  My home is my castle is part of the American dream. If you give the lot directly to your child and that child maintains title in his or her name alone there is power imbalance in the marriage.

It can have deep consequences. It also has practical problems-who will be on the mortgage? Should both spouses pay the payment? Would it be fair to ask for your daughter to ask her husband to pay part or the entire mortgage from his earning but not give him an equity stake in the house? If the lot is in joint name then without a contrary written agreement should the couple divorce your ex son-in-law would in all likelihood receive one-half of the equity of the lot.

A possible solution is to ask your daughter to enter into a pre-nuptial agreement prior to marriage that mandates that if there is a divorce the value of the lot at the date of the marriage comes back to her first and any appreciation is split 50/50. An alternative is to lend, not gift the lot to both your daughter and son-in-law and have them sign a promissory note and recorded mortgage. Should they divorce both of them owe you the money and only the net equity in the property would be split.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently announced the release of an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  Annino’s book is an exhortation, resource and trusted companion for women in all facets of life.  To purchase the book visit:  http://amzn.to/hOHuEV or for more about Annino, visit: www.patriciaannino.com


  1. Mark Hartnett says:

    Have you had a conversation with the family/children to see if any of them would want to build a house on some of the family land?

    Also, I don’t know how realistic it is to expect families to remain in one location permanently. Circumstances change, people change and families evolve over time. I think it would be very difficult to craft a solution that works long-term to the benefit of the entire family.

    • I have – the problem with that can become subsequent subdivisions and land use so that has to be explored with an estate planner and a real estate use lawyer- it is an interesting option when well thought out.

  2. Another important consideration are the gift tax implications involved in such transfers. For a discussion of this problem and the new IRS audit risks your readers may be interested in my just published article entitled IRS Checking Real Estate Transfers For Unrecorded Gifts at the following link: http://www.sjfpc.com/IRS_Auditing_Real_Estate_Gift_Tax_Rules_Returns_Form_709.html. Or you can just go to my website at http://www.sjfpc.com.
    A final point would be that in most jurisdictions gifts are not subject to equitable distribution. The bottom line here is that should check with estate planning counsel before doing anything in this area.

    • Good points Steve and one of the other points to underscore is that it does not matter whether or not the parents live in an equitable division state -it is where the child or grandchild goes gets married and divorced. That jurisdiction could be an equitable division state and the laws of the parents state will not protect the parents assets from being looked at in the child’s divorce.

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