I have a house that I still owe money to a bank. I would like to give it to my son for an Inheritance. The bank says re-finance

This inquiry triggers several issues for you to consider:

First, are you okay without this home as an asset? I alway want to make sure clients have the assets they need before they make substantial gifts.


Second, do you really want to give the home right now, outright, to your son? This will expose it to all of his liabilities (for example, if your son owes money to someone (a creditor), the creditor will be able to obtain a judgment against him and collect his judgment against the house). There are a lot of variables in this situation that could result in your son losing equity in the home (marriage issues, financial issues, business issues).

Third, have you previously made any gift such that this gift might trigger gift tax? I am guessing you have not, but this should be considered.

There are other issues too.

Overall, I think you should consult with an estate planning attorney regarding the gift, and explore giving the home to your son through your trust or another structure. If, after consultation, you want to give this home to your son, he will likely need to refinance (or you will continue to be liable for mortgage payments on the home). Depending on the amount of equity in the home, he should not have difficulty in refinancing (assuming he has good credit).

Best of luck.