My parents are elderly - 82 and 80 - and have a small mortgage on a rowhouse. They have a limited income and receive reduced yearly taxes because of it. My brother resides with them and helps take care of them.
Our family has decided if anything should happen to them, we would like for our brother to take over the home. Can we contact the mortgage company and add my brother to the loan and if so, what would that do to the reduced taxes?
Additionally, we also wanted to add his name to the deed at a limited cost. Can we do that or do we need an attorney? Would there be a cost of stamps for the deed?
I suggest your parents sign a life-estate deed, naming your brother as the remainderman. A life-estate deed means that your parents have the right to use and occupy the home as long as they live. When the last parent dies, full ownership of the property will vest in your brother by operation of law. As life tenants, your parents will continue to be eligible for reduced real estate taxes.
There are two types of life-estate deeds. One type irrevocably provides that your brother will get the property upon your parents' death, and requires his consent to any future conveyance or mortgage of the property.
The other type of life estate deed preserves your parents' power to sell, mortgage or convey the property during their lifetimes without the consent of the remainderman.
You will need to consult an attorney to prepare a life-estate deed. The lawyer should also review your parents' mortgage on the property to determine if the consent of the mortgage holder is required to add your brother's name to the title.
The life-estate deed must be recorded in the land records of the county where the property is located. Adding your brother's name as remainderman should be exempt from recordation taxes ("stamps") or transfer taxes. The only recordation cost will be $40 to record the deed and the cost of a lien certificate, if required by the county.
An alternative is for your parents to make wills that leave the property to your brother upon the death of the last parent. If your parents have other assets besides the home, wills may be appropriate.
Your parents also should consider executing durable powers of attorney, authorizing one or more family members to sign legal documents for them in case they become physically or mentally disabled. Again, an attorney can review your parents' financial situation and advise if wills or powers of attorney are necessary.