1)The bank isn’t going to just “might” have an issue with this…The bank IS going to have an issue with this. Although one can quit claim deed to your hearts content, it doesn’t remove anyone from the financial responsibility of said mortgage. That house is still secured by that loan (assuming it’s a first), and most like this type of sheneggian would trigger a “due on sale” clause in the loan if the end result is there no one on the original loan no longer has ownership interest of the property. The exception would be quit claim to a your living trust, for estate planning purposes… I guess the daughter could try to have said mother put daughter on title first, and then daughter tries to refinance with financial responsibility completely on her, and the followed by a quit claim deed by mother.
But, again, unless daughter is going to live in home or unless the home can cash flow as rental, that’s going to be a financial drain, which begs my second question: why?
2)Quit claim deeds to anyone other than a spouse or a trust for which the spouse(s) aren’t one of the trustees (or ex-spouse in the case of a divorce) is considered gifting and the standard gift tax rules applies….In addition, at least in CA, doing such type of quit claim deeds can/likely would trigger a prop tax reassessment…..otherwise, it’s a clever way to keep your property tax base for your kids ……….I guess as an experiment, in theory, buying a house under a separate entity such as a corp, and then just passing on controlling interest in that entity probably could skirt such property tax reassessments, but there are probably rules around that too (though i admit, I haven’t investigated or experimented with that…yet), not to mention good luck finding a lender who will lend money under this arrangement.
